Here’s a quick quiz.
Name the number one reason why:
a) Customers don’t buy.
b) You don’t win competitive bids.
If you are like the majority of sales pros your first response to both of these statements is “price.” And in the current economy, where tighter belts are the fashion trend, you are even more inclined to jump to this answer.
Well, I’d like to suggest that “price” is often the biggest cop-out for both the customer and the sales pro.
Now don’t misunderstand me. Nobody wants to pay more than necessary for anything. We’re all looking for the best deal. But, in my experience, many sales professionals misunderstand, or misinterpret, the price issue.
Here’s the reality …
Price is not a reason.
Price is either a condition or a symptom.
What do I mean?
If you lose the sale on price, and particularly if this comes as a surprise, then it points to one of two things:
- Your discovery process was weak and you did not clearly identify that “lowest price” was a condition of the sale, or
- If you did a superb job of discovery, and your proposal answered the customer’s core business interests and priorities, then the “price reason” is a symptom of something else.
Price is a condition
Identifying critical buying criteria and conditions is a key part of the sales discovery process, and one that receives far too little attention from sellers. The onus lies on you to get clear on what the customer’s buying conditions are in any specific sales opportunity (as they will change) so that you are in a position to answer two key questions.
- Can I win this business?
(i.e. Can I compete?) - Do I want this business?
(i.e. Is this good business for my company?
If your answer to either question is “no” then move on before you waste precious time and resources. And if there are strategic or political reasons why you, a premium priced provider, must bid when you know that price is a condition, at least you are doing so with your eyes open.
Price is a symptom
Early in my sales career I lost a very important account to a competitor. I was devastated and asked my contact for input. He told me it came down to the fact that we were considerably higher in price. I asked for 20 minutes of his time to get further feedback. I assured him that I was not trying to shift the decision – it was clearly too late. I wanted to learn from the experience and be in a position to better support him when future opportunities arose. He graciously agreed to see me.
As we reviewed my proposal it became apparent to me that price was not the issue. There was something else. I forced myself to ask the uncomfortable questions and it turns out the problem was me.
My presentation to the decision making committee missed the mark. I had done a poor job of understanding the unique expectations of two important decision makers and failed to address their interests. My competition had done his homework and he outsold me – fair and square.
Hearing this hurt. But I’m thankful I pushed myself to get to the cause because I took away two of the greatest learnings of my sales career:
- An understanding of the unquestionable importance/power of the discovery phase of the sales process.
- A commitment to never blindly accept price as a “reason.” And to push through the discomfort to get beyond the symptom to the cause.
Want to avoid the price trap?
Get masterful in your discovery. Focus on uncovering the critical criteria and buying conditions from the customer(s) point of view. So you know early in the process whether or not price is a primary condition.
And, win or lose a bid, use your discovery skills to get crystal clear why you won or why you lost. Never accept the first, or easy, answer. There’s always more. And valuable growth opportunity lies in the “more.”
