Key points
- A technical lead buys less and less time against price pressure.
- The difference comes from services, data, and new revenue models built around the product.
- Start with a few clearly prioritized services, not a grand platform vision.
- Sales and service must be able to sell the new offering, or it never gets past the proof of value.
Many industrial companies know the situation: their product is good, often even better. Still, they lose tenders because a competitor from China offers something comparable for much less. The gap in quality and technology keeps shrinking. The price gap does not.
The pattern: from technical lead to price comparison
As long as a product is clearly superior, customers compare performance. Once products look comparable, they compare prices. That is exactly where many manufacturers of machinery, components, and industrial systems stand today. Chinese suppliers deliver solid quality, build service networks, and scale through volume.
The effect is gradual: discounts get bigger, margins get smaller, and product management puts more energy into cutting costs than into building something new.
Why the price war can’t be won
Cost structures differ fundamentally: economies of scale, energy, wages, government subsidies. Responding on price costs you margin without changing how the customer sees you. The better lever is to change what the customer compares.
Where the difference comes from
Three levers have proven themselves in practice:
- Services around the product. Remote monitoring, predictive maintenance, fast spare parts. The customer is no longer buying just a machine. They are buying uptime.
- Data as proof. A connected product can show what it delivers: energy consumption, operating hours, quality. That makes promises possible that a low-cost supplier can’t easily make.
- New revenue models. As-a-service, pay-per-use, or guaranteed outcomes. The customer pays for what benefits them, and the manufacturer earns over the full term.
All three levers move the conversation away from unit price and toward value over the product’s lifetime.
Start small, but start right
A common mistake is the grand platform vision: years of development, a big budget, and in the end a system nobody wants to pay for. A step-by-step approach works better:
- Find the customer problem that hurts most, such as downtime, energy costs, or a shortage of service staff.
- Design a service that solves exactly that problem, ideally with data that already exists.
- Test it in a proof of value with a few customers and check their willingness to pay, not just their interest.
- Only then expand: more services, more markets, more partners.
The underestimated hurdle: your own sales team
Sales is trained to sell machines. Commissions reward one-time revenue, and services feel like extra work. Without the right incentives, talking points, and training, even the best digital offering never gets past the proof of value. We cover how to enable your teams in our article Digital products don’t sell themselves.
Bottom line
In this context, digitalization isn’t an IT project. It’s a business model decision. Companies that start early build customer relationships and switching barriers that a lower price can’t buy.
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