Why Doesn't the Lowest Price Win Anymore?

There was a time when the lowest bid won. You could be forgettable, generic, and a little slow, and still take home the business, as long as your number was smaller than the next guy's.

That time is over. And I don't think enough people in this industry have noticed yet.

I discussed this topic recently with Matt Danilyw, CEO of Avanto, on a Hot Takes episode of the show. We spun the wheel, landed on a question about how the definition of value has changed over the last five years, and what came out of it applies to every dealer, rep, and manufacturer.

Price used to be the whole story

For a long time, "best value" was just code for "cheapest." I never bought into that, but our customers did, and so did the influencers shaping their decisions. Lowest price won because there wasn't much else to compare.

That's not true anymore. Service and experience now outweigh price in almost every buying decision I see. You don't have to be the cheapest option on the table to win the business. You have to be the clearest one, clear about what you add, clear about how you'll take care of the customer, clear about the long-term partnership you're offering instead of the one-time transaction.

That's exactly why I think the bidding process is one of the most outdated things we do in this industry. It doesn't give a dealer, a manufacturer, or a design firm any room to show what they're actually worth. It reduces a relationship to a number.

AI made your customer the smartest person in the room

Here's the part of the conversation that stuck with me. Matt told a story about comparing two expense management platforms; he didn't call a rep or read a review site; he asked Claude for an analysis and got an answer on the spot. His customers are doing the same thing to him, and your customers are doing the same.

"People are going to those types of platforms first. Now they're still coming to us to validate it and get our opinion, which I think is important for now, but talk about how value is gonna change for the last five years, it's gonna be interesting how it changes in the next five years."

Read that again. Your customers are a lot smarter today than they were last year, and dramatically smarter than they were five years ago, because the tools in their pockets have gotten that much better. If your entire value proposition was "I know more than you do," that gap just closed. Fast.

The back office is where habits go to die slowly

Matt didn't hesitate when I asked what our industry keeps doing simply because we've always done it that way. His answer: almost everything in the back office. Quoting, order entry, AP processing, PDF-to-SIF conversion, manual work that persists not because it's efficient, but because it's familiar. It feels productive even when it isn't.

The phrase "because we've always done it this way" should be retired from every vocabulary in this industry. Every time you catch yourself or someone on your team saying it, stop, ask if there's a better way, and go find out. It takes courage to try something different, and if it doesn't work, that's fine; you learn something, and you iterate. But you have to be willing to try.

If value has shifted from price to expertise and experience, the manual busywork clogging your back office isn't just an efficiency problem. It's a value problem. Every hour your team spends on rote data entry is an hour they're not spending on the thing your customer actually can't get from an AI tool: judgment, relationship, and expertise applied to their specific situation.

The businesses that win in the next five years won't be the one with the lowest price. It'll be the one that figured out where AI ends, and human expertise begins, and built its value proposition around that line.

This idea came out of a Hot Takes episode of The Trend Report, Episode 198, with Matt Danilyw. This is a fun and engaging conversation!