I don't sell hardware. But I spend a lot of my time in the aisles of security, Pro AV, and HVAC expos across Latin America and the US, talking to the people who do.
Ask a manufacturer what worries them most, and you'll hear the same answer, just in a different way. The new low-cost brands.
The worry centers on brands that weren't on anyone's radar 2 years ago. They show up with an aggressive price and start winning projects.
And the manufacturer with the better product is left asking the same question: why do we keep losing to cheaper brands?
I think a lot of the answer sits in how the purchase decision gets made. It's the first of the 7 parts we cover in our guide to B2B go-to-market strategy for technical manufacturers in Latin America.
Why the cheaper option wins
In many projects, the decision comes down to purchase price because the other costs never make it to the table.
Look at it from the integrator's side. They're under pressure to win the bid. Two spec sheets look about the same, and one price is lower.
The distributor has its own math, starting with margin and what's in stock. If the cheaper brand makes that math easier, it gets pushed.
That doesn't make them careless. They're deciding with the information they have.
What the cheaper choice costs the integrator later
The bill for a cheap choice rarely arrives on day 1. It shows up months later, and the integrator usually pays it.
Here's what that looks like in practice:
- More support calls. Every callback costs a technician's day and some of the customer's patience.
- Integration failures. The camera doesn't talk properly to the access control system. The controller won't work with the building management system.
- Performance problems. The equipment works in the demo and struggles in the field.
- No support when it counts. When something breaks, there's no local support, and sometimes no spare parts either.
I've heard the same pattern outside security. One HVAC manufacturer told me installation errors in the field were turning into equipment failures and warranty claims. The cost of a weak decision landed after the sale.
When price really is the problem
I'd be lying if I said better messaging fixes everything. Some deals are lost on economics.
If your distributor can't get stock or credit, a better story won't save the sale. And in tenders decided only on upfront cost, you'll lose some projects no matter what you say.
Know which deals those are. Then put your energy into the ones where the decision is still open.
What your premium actually buys the channel
When an integrator or distributor pays more for your brand, here's what they should be getting. It's also what you need to make visible:
- Fewer callbacks and warranty claims.
- A person to call. One manufacturer told me technicians value a human on the phone more than a video they don't have time to watch.
- Training that makes their team better at the job.
- Integration that works the first time.
- A brand their customers trust, which makes selling easier.
Research on B2B buyers points the same way. In a 2018 Harvard Business Review article, Bain's Eric Almquist and 2 co-authors identified 40 elements of value that B2B customers weigh.
Their argument: as B2B offerings get more commoditized, the less objective elements gain weight. In practice, that means trust and lower risk count more as products start to look alike.
Your extra value is real. The problem is that the people choosing often can't see it.
Who needs to hear it, and in what words
The same value sounds different depending on who's listening.
- The distributor wants margin it can protect and fewer returns.
- The integrator wants fewer callbacks and a system that works the first time.
- The specifier wants performance they can put their name on.
- The end customer wants less risk over the life of the system.
Who matters most depends on your category and your market. I'll go deeper on that in February, when we look at the hidden decision-makers in B2B sales (coming soon).
How to build the program, step by step
A sustained communication program can make your value visible to the people who decide. Here's how I'd build one.
- Ask your distributors why you lose. Get the top 3 reasons from each. Then separate the ones that are really about price from the ones about value that never got explained.
- Write the value story for each audience. Use their words, from the list above. One page per audience is enough to start.
- Back it with proof. A documented project in the same market beats any claim. More on that in March: from finished projects to sales opportunities (coming soon).
- Teach it. Put the value story into the training you already give installers and integrators. January's article, market education (coming soon), covers how.
- Keep it running. One campaign won't change how a channel decides. Plan for months, and measure it by the conversations it starts with distributors and integrators.
Common mistakes
- Talking specs to installers who want to know what happens after the sale.
- Running one campaign and calling it done.
- Matching the cheaper brand's price. You teach the market that your premium was negotiable all along.
- Forgetting the distributor's margin. If your value story doesn't help them make money, they won't tell it.
The low-cost brands are here to stay. And a lot of the deals they win are deals where the alternative was never explained.
Losing deals to cheaper brands?
Send us the 3 reasons your distributors give when they lose. We'll tell you which ones are messaging problems and which ones aren't.
