Better before cheaper

Raynor and Ahmed studied twenty-five thousand companies over forty-five years looking for what the exceptional ones had in common. They found three rules. Better before cheaper: compete on differentiators other than price. Revenue before cost: prioritise increasing revenue over reducing cost. And there are no other rules.

The book takes the first as its epigraph for chapter 3 because it is the whole argument in four words. Cheaper is always available to a competitor with a lower cost base or a worse quarter. Better is only available to a supplier who knows what the customer would pay more for, and the customer value proposition is precisely the instrument through which a supplier competes on better rather than cheaper. If you cannot write one, you are competing on cheaper whether you meant to or not.