Price - What's in a Number?
Avoiding the price trap takes work, but what in sales does not? Using our EDGE model, with the focus on ZONE Based Selling, provides a process and framework for managing this. At its core is a simple concept, make the discussion around numbers relative to the value to be realized, the impact you can deliver, not relative to the dollars invested or a competitor. As you would expect this involves two specific things that have to be executed in concert.
First, understanding the client's business and the value and impact that you can have on it; then developing questionsthat surface those factors, including follow up question to borrow beneath the veneer of knee jerk answers prospects may provide at the outset. It is often these secondary questions that get the buyer to really think through the issues. They may have been thinking about something in a certain way, and can respond to major aspects of the subject, but the follow up questions not only cause them to stop and think, but also put you in the light of a subject matter expert, and adviser. You can see the lights going on, "that's a different way of achieving..."
Second, as you Discover areas of mutual agreement/fit, quantify them. Quantify objectives and aspirations that present themselves in the process, especially potential positive returns. Don't hesitate to question how they arrive at certain assumptions or numbers. This will allow you to discuss price relative to returns the buyer has presented, not relative to price. Many people will "qualify", but you can do a lot more if you quantify, because you can now deal with real variables.
Quantify – Don’t Qualify
For instance, you may be selling a true wireless solution connecting your teams in the field not only with one another, a scalable platform, which can at the same time communicate with systems back at the office, an ERP for example. Your solution offers seamless integration and delivers reduced errors, reduced time to orders and invoicing, eliminate lost orders, reduce the required level of inventories, increased the number of service calls you can do in a day, and other tangible benefits. You are competing with a supped up cell phone offered by one of the carriers, probably efficiently achieve some of the above, but not all, and would require both hardware and software upgrades as the buyers requirements evolve.
If a buyer looks at it purely on a price basis, the supped up cell phone looks attractive, based on outcome, impact, improved processes and other results, the seamless solution is better value, and will deliver more upside. It is up to you to manage the Discovery process to be able to Demonstrate Impact. By executing the questioning routine highlighted above, you can move the discussion from the cost bandwagon to the returns bandwagon. After all, what is better a $1 saved, or $3.50 return on a $2.00 investment? If you can demonstrate that this advantage will be in place for four years, you can contrast $4 dollars saved with $6 net return.
I am not minimizing the effort of taking the discussion to returns, but it is doable if you focus on their business from a business perspective, not an "I need a sale" perspective. It also takes the will, knowledge and calluses to resist giving a number before you can build context.
Recently I sat with a potential buyer, very early in the meeting she asked, "How do you charge?" I explained our two models (project or program). Remember we just got past the small talk. She followed up:
Buyer: I need a number!
TS:No problem let's look at what is involved, what we are looking to achieve, project/program – scope, and then we can talk numbers, after all how will you evaluate the "number", what will you compare it to?
Buyer: No, you don't understand, I need a number so I know what I am dealing with.
I was thinking I need to know what I am dealing with as well, but did not say that; what I did say was:
TS:OK, number 1, that's my number, number 1. How does that compare?
Now I am not advocating that people use this approach, I don't, but I had to make her understand that not only is the number meaningless, but there is also a risk that she is encouraging her people to sell on price. (No, I didn't get the deal, yet, I did raise my number once we defined her needs, and I do have a next step.)
Remember that price is relative; relative to the value the buyer is anticipating, the greater the value, the greater opportunity to base the sale on value not price; the level of value anticipated is relative to the way you sell it.
Tibor Shanto – Principal - Renbor Sales Solutions Inc., is a recognized speaker, author of award winning book Shift!: Harness The Trigger Events That Turn Prospects Into Customers, and sought after trainer. Tibor is a Director of and a contributor to Sales Bloggers Union, and his work has appeared in numerous of sales publications and leading websites. Tibor can be reached at info@SellBetter.ca or + 1416 822-7781. You can read our blog, The Pipeline with new material three times a week, and follow Tibor on Twitter @Renbor.