We’ve all heard or even say in jest “Have I got a deal for you” with a wink and a smirk. In today’s commoditized and competitive environment, most of us are conditioned to compare raw product prices instantaneously on the internet, from high-end technology products, to designer clothing and shoes, to toothpaste and tissue paper.
We often default to focusing on discounts right off the bat when we talk to our clients about our product and services because it seems to be the key priority for the customer and a short cut to a quick close.
How many times have you thought you had nabbed the deal of the day, complete with the lowest price and 5-star ratings, only to find that what you got when you open the box does not resemble anything you saw in the little picture, the pieces don’t fit together, or the product does not work as advertised.
Ultimately, as intelligent buyers, we should be looking for “value,” of which price is only one of the components.
In business technology sales, we see the same phenomenon. However, all is not lost. From our experience, the most successful companies provide their sales people with relevant quantifiable information not only on their own offering, but also on competitors’ products, pricing, and value, as well as resources to help apply to the customers’ environments. And, the most successful sales folks always approach customers with an in-depth understanding of their customers’ needs and objectives–strategically, economically, technically and administratively–so that they can calibrate their business and value propositions accordingly.
You don’t always have to be the lowest priced, but you must offer the the best value. One of the most successful sales managers I have worked with always starts with meticulously gathering customer needs from the perspective of business imperatives and objectives. Then he develops a proposal with relevant quantifiable benefits such as savings from operational efficiency and resulting business growth. He also makes sure he has a clear understanding of his customers’ budgeting and buying process to help him structure a deal that would be additive to his audience’ performance and financial metrics. A clear understanding of his competitors’ tactics are also key.
Contrast that to the all too common scenario of trying to give massive discounts as a lever. From my experience, the former not only almost always close his deals profitably and repeatedly, whereas the latter often get caught in interminable rounds of negotiations, and when the deal does close, it was at the highest discount, which becomes the starting point for the next sales cycle.
In the end, yes, price does matter, but it is not the discount level or even the price per unit, but the economic and strategic impact to the customer and stakeholders – from today’s implementation cost, to what it costs to grow with the customers’ business, maintenance, and just as importantly, the operational and strategic impact on customers’ business.