Self-created Barriers to Business Growth: Breaking Down, Breaking Through — in conversation with Lisa Spadafora Thompson
For individuals and companies alike, barriers to growth are often self-created. Asking salient questions can take us to the root of the problem, understand why we’ve created self-defeating narratives, and lead us to viable action plans for productive change.
We’re talking with Lisa Spadafora Thompson, an intrepid change maker and seasoned problem solver who has helped countless companies break down barriers — and break through to all-new solutions.
Lisa, over your remarkable 30-year career in consulting, you’ve helped countless clients overcome self-created barriers. Can you walk us through your approach?
Clients come to me often with a similar lament. It goes like this: “Our CEO wants us to increase prices and sell more. But the market has commoditized us, and competitors have caught up. This feels like an impossible ask. Can you help?”
Usually, they’re right — competitors have replicated many of their capabilities. Customers are negotiating more aggressively. That’s just how business works. But I challenge their claim, “The market made us a commodity.”
“No, the market didn’t make you a commodity,” I maintain. “You let yourself become a commodity.”
What does that mean, exactly?
Let’s consider this scenario. A client in the heating, ventilation, and air conditioning industry is concerned that Chinese competitors are manufacturing the same valve the client manufactures — at a much lower price. Customers want to pay less for the valve. The client tells the customer the valve costs $10, and the customer asks for $8. The client adjusts the price to $9.
My response to the client: “What message are you sending to your customer by lowering the price? You’re teaching them your valve isn’t worth the $10. In the next negotiation, you can expect the customer to push harder for an even lower price because you indicated your product is a commodity.”
“The Chinese models are as good as your valves,” I note. “So you won’t get a penny more than they’re paying the Chinese competitor. The question, then, is this: ‘What does your customer lose if they don’t have you?’”
When I dug deeper, I realized that often the Chinese valve would be good enough. But sometimes the customer needed very fast turnaround and delivery, and the Chinese competitor couldn’t meet the customer’s timelines. Also, the competitor couldn’t provide the training services my client offered that enabled the installation team to install quickly and effectively the first time.
Bottom line? Yes, the competitor commoditized the valve, but the client commoditized its own value proposition by not understanding what the faster delivery times were worth to the customer.
I ask a series of questions like this, and my clients begin to see how they’ve erected barriers themselves that are impeding their growth. Then we’re ready to look at the roadblocks, one by one, and take them down.
With all the clients you’ve worked with, have you found the barriers are similar? What are the top challenges?
Yes, the roadblocks span across industries, starting with following negotiation practices that are self-defeating and giving away for free what’s of real value to customers. Another barrier is overpricing. Clients don’t understand their true cost of a sale so they include costs that aren’t relevant to selling the next unit of product or serving the next customer. As a result, they lock themselves out of lower-priced markets they actually could serve profitably.
The ultimate goal in taking clients through this assessment is to help them move from a reactive and self-defeating process to a proactive and strategic one — effectively repositioning the company’s value and charging for it appropriately.
Thank you, Lisa, for sharing with us the wisdom of your experience.
Lisa Spadafora Thompson is a pricing and profitable growth expert with an entrepreneurial mindset. Through her company, Sturbridge Growth Partners, she delivers highly customized, actionable solutions, helping companies break down self-created barriers that keep them from growing profitably. The result is viable pricing strategies and win-win deals that consistently exceed revenue and profit goals.
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