A couple of weeks ago I lost an opportunity I feel I should have won, and as you have read here in the past, you need to invest the time to understand why deals turn out the way they do. I asked a couple of people I know who were also involved in sales training, to sit down and conduct the review. In essence, they play the role of the manager, and keep me honest. The goal is to learn if the deal was sealable, and if so what could I have done differently. If that's not the case, are there any trends we can glean and incorporate into future sales; or are there cues we can learn to recognize the deals that are not going to happen earlier so that we can move on faster.
I was taken aback when the first question one of my peers asked was: “do you think you would have won had you priced it lower?”
Wow, what an uninspiring start. I guess if I gave it away free I would be busy 5 days a week, but my kids would starve. I looked at her hoping she would continue, and asked her why she started there, especially when I had shared with her and the other fellow involved the form/tool I use of our reviews, exploring many factors beyond price. What worried me, even more, is that this person was involved in working with sales teams, and this was top of mind here, what is top of mind when they are out in the field.
The importance of reviewing the deals you win and lose is in understanding the trends behind the decisions. Every time a buyer does not buy from you is not a failure on your part, and the reviews will help you delineate between the two. There are buyers who will not pay for the value of your offering regardless of how well you communicated. It is important to understand which end of the communication failed. If it was you, then you need to work to change how you do things, and reviews will help. But if it was the buyer’s failure to understand/appreciate the value when you did everything you had to, it is better to know that and why, and how to recognize it moving forward. Communication works two-way, and it could well be that the buyer does not see the value or does not want to pay for it, yes they are cheap. And none of you want cheap customers. The quicker you can spot one vs. the other, the quicker you can decide who is worth your time and resources, or which opportunities you can abandon early.
Fine Print – the above is predicated on having a healthy pipeline of real opportunities, it is a lot easier to walk away from a bad thing knowing there are other opportunities to work with than to walk away from the only thing left in your pipe.
Price is easy, in fact, it is addictive; sellers need to compete on value, not price. Much better to get your clients addicted to your value/quality, then you becoming addicted to discounting. As with anything addictive, you run the risk of not just selling at a lower price, but for the wrong reasons. At first, you figure, "hey what’s a 3% discount!", but once that becomes comfortable, you need a bigger fix. When you come up to the next resistance, you hesitantly try one more point, then another, and another... and you are at 5%. You figure on $100,000 deal, say 8% commission, going to $95,000 will only impact you by $400, but could be the margin for your company. Remember that next time you wonder about investment in product development, marketing, resources, and all the things the $5,000 you gave away could buy.
About the Author:
Original article written by Tibor Shanto: http://www.sellbetter.ca/price-a-hard-habit-to-kick-sales-exchange-171/
Tibor Shanto is Prospecting & Sales Execution Specialist specializing in B2B companies that deliver professional development for professional sales people. He aims to help sales professionals better execute their sales process, with a focus on new client and revenue acquisition. He has worked with hundreds of companies and thousands of reps, helping them understand that success in sales is all about Execution – Everything Else Is Just talk.
Disclaimer: The views and opinions expressed in this article are strictly those of the author. CPSA does not endorse any of the companies, products and services mentioned within this article.