Price is always a touchy issue for salespeople, even more so in today's environment. Not only because the economy has made everyone more price sensitive, but also because active buyers engage their own networks before they do sellers. Furthermore, buyers are more informed about your product and specifically your price.
Salespeople don't want to win or lose strictly on that singular factor, but often do. While some companies and salespeople have given into discounting, others resist, and work to maintain price integrity while not losing revenue or clients. This is the exact discussion I had with a sales manager last week at Starbucks. She was lamenting the number of deals decided on price alone, regardless of quality differences.
Starbucks was an interesting place to have this discussion. People who know me will tell you that coffee is one of my few vices; four or five cups before 9 a.m. – easily a dozen by days end. I go to the coffee chain not because they are the best, but because I appreciate the quality, consistency and predictability of the experience. No matter if I am in Toronto, Las Vegas, London or Grand Rapids, the experience is consistent. Put this way: when it comes to the nectar of the gods, I don't want any surprises. I want the hit I am expecting and that's exactly what Starbucks gives me – from the surroundings, the atmosphere, the coffee, to the disciples of Landru baristas. All satisfying my expectations, Starbucks provides a predictability I find worth paying a premium for.
The added bonus of my coffee addiction is the daily reminder that I don't have to be the lowest cost provider to consistently win business, even when there are alternatives that offer more than an incremental price advantage. Just as I think the difference is worthwhile, you too can find and sell to buyers willing to pay a premium for what you have, when you focus and sell them based on those specific elements.
In fact, you're probably doing this but aren't completely aware of it, and therefore not fully leveraging it. Rather than me proving this, you can do it for yourself. Ask your top 5 to ten clients the following: "Why do you deal with me and my company?"
What you'll find in almost all cases price is not at the top of the list. In fact, it rarely appears in the top three. What will be on the list are some of the attributes listed below:
- Understanding and helping their Business
- Thought leadership Unique expertise/perspectives
- Ease of relationship, including problem resolution
- Challenge and educate
- Reacting to their needs
- Innovativeness – R&D
- Total product offering – Total cost of Ownership
- Technical education
- Frequency of sales calls
- Preparedness for sales calls
Knowing specifically which attributes resonate with your clients will help you develop talking points and talk tracks. In turn, this will lead to a similar quality discussion with potential buyers who value those elements, and are willing to pay full value or a premium. Others who don't care about those attributes are likely the buyers who won't pay, giving you the comfort to move on rather than engage in fruitless time consuming negotiations and frustrations. Those that don't fit will be there once you have exhausted all the opportunities with those who do fit, with likely shorter sales cycles and more rewarding ongoing relationships.
The exercise will also start you implementing a best practice used by most successful sales teams, deal reviews. Reviewing why deals turned out the way they did has a number of dividends. But unlike what some pundits will tell you, the key is to review all deal types, not just one type. Only reviewing your wins or losses is fraught with risk and can result in tunnel vision. Instead try looking at all three deal outcomes: wins, losses and 'no decisions.' It doesn't take much time but the resulting insights are invaluable.
Price is in the eyes of the beholder, it's up to you to target and engage with those who will see it in context. Time for a coffee.