Selling Price: How Not To (Part Three)
I am always interested in reading your feedback and your comments to my thoughts and my posts. I received a lot of comments, emails, and links to my post on how not to sell on price.
This comment from Ghassan Alkhlout popped up in my email from one of the groups I subscribe to on LinkedIn.
Excellent post! And I strongly agree with your argument, but don’t you think that selling value may require special skills within the sales/marketing team and it may have longer sales cycle, also in a highly competitive market your rivals will do the same and it reach to the point that customer has to make his decision based on price.
First, it’s always nice to have positive feedback. But Ghassan’s comment requires a greater discussion of the points that he makes, and Ghassan has allowed me to republish his comments here so that I might respond in way that allows me to share my thoughts more widely.
Selling Value Requires Special Skills
It may seem like it is difficult to sell the value that you create when you compete with salespeople and organizations that sell price (even when it isn’t their company’s strategy to do so). It may be more difficult now, when so many companies are focused on price, believing that they can cost cut their way to success (or at least to survival).
But does it require special skills? I think that creating value and capturing that value is the standard for B2B salespeople, not a special skill. That being said, it is always difficult to do, and even more difficult to do well. This is what makes it special, not the fact that it isn’t price.
The opposite, however, is true: it does not require any special skills or salesmanship to simply sell price. You only have to focus on identifying prospects that care about price above all else. You don’t have to do much of a diagnosis or needs analysis, because any value you have the ability to create there will, more than likely, be something that is too expensive for your company to provide anyway. When presenting, you can flip right to back of the binder with the price sheet with great confidence that that is what will win the day.
Short answer: Selling value instead of price doesn’t take special skills—selling well is a special skill.
Selling Value Has a Longer Sales Cycle
Selling value may have a longer sales cycle. It depends on when your dream client enters your pipeline and on what stage of the buying process you find them. If they are not dissatisfied, you may have to nurture the client over a long period of time. If they are dissatisfied, or if you can create dissatisfaction by defining a gap between their present performance and the performance they could be (or should be) achieving, the sales cycle may be shorter.
It is true that selling something more than price does take time. You need to do a deeper needs analysis, the kind that enables you to understand the ground truth before you diagnose and present. But most of the failures in compressing the sales cycle is caused by the salesperson’s reluctance to ask for and to obtain the commitments that would make the process faster (especially when there is real dissatisfaction and real performance gains to be had).
My good friend, David Brock, believes that we fail to compress the sales cycle because we don’t focus our time and attention getting the furthest advance that we have earned, and I agree with him. This has nothing to do with price, and more to do with sales behaviors.
The short answer: No, selling value doesn’t have a longer sales cycle.
Selling Value is Hard When Your Competitors Do the Same. Then Your Client Decides On Price Anyway.
Now, we get to my favorite part of Ghassan’s comment. Aren’t our competitors doing the same? The answer is, of course, yes. Your competitors are doing the same, trying to create the differentiating value that allows them to win the deal, create a better outcome for their dream clients, and to capture some of that value for themselves.
It isn’t safe to be complacent and to fall asleep.
And, the answer is, of course, no. Some of your competitors are not trying to create a differentiating value that allows them to win the deal, create a better outcome for their dream clients, and to capture some of that value for themselves.
Many (most) of your competitors are not selling anything more than price, and most are simply vendors.
But, if your customer decides based on price alone, you have failed as a salesperson.
If your customer decides on price alone, you did nothing to differentiate yourself or your offering from your competitors. You behaved like a commodity. If your customer doesn’t believe wholeheartedly that you will do a better job of bringing value to them, if they don’t believe beyond the shadow of a doubt that you will manage the outcomes that you have promised and sold, ensuring they achieve a better result, than you have not differentiated yourself. You haven’t shown them you are the difference that makes a difference.
If they feel the same about the value you create as the value your competitor creates, than you have failed. I know that’s tough stuff. But you have the greatest ability to influence the outcome, and you have the ability to be one of the critical factors in your dream client’s decision.
If your customer decides on price alone, than you haven’t spent time in the trenches discovering the ground truth and listening to the people who truly have the authority to choose you and your offering, influencing those above them and beneath them. Your needs analysis, if done well has he ability to define you as a professional with the business acumen to help your dream client with their most pressing business challenges. Your questions do more to impact how your dream clients feel about you than do most of your statements.
If your customer decides on price alone, then you did not tell your story in a way that provided them with a vision of how they could get to a better future with you. If your story was the same story they heard from everyone else, then you are behaving like a commodity. If what you do isn’t remarkably different, if what you believe isn’t remarkably different, then you are behaving like a commodity. Your company has to be different in a meaningful way, and it is your job as a salesperson to tell your story in way that makes those differences clear.
If I can take your competitor’s name and put it on your PowerPoint presentation and your written proposal, you are a commodity. Who you are and what you do must be different. If not, you will be forced to sell on price and not value.
I believe that you as a professional salesperson are duty-bound to sell on more than price. That may mean you have to sell inside your own company to define what it is that you do that makes you worth paying more for, and what you need to do sell this instead of price.
Most of the reason that you dream client is choosing on price is because you failed to make it worth their while to pay more.
Selling isn’t easy. Selling the value you create is difficult because selling is difficult. Ultimately, whether or not you sell price is greatly impacted by what you as a salesperson do to create value for your dream clients.
- What skills are required to sell well when you don’t sell price? What skills aren’t necessary when all you sell is price?
- Is your sales cycle longer or shorter when price is the determining factor for your prospect? Should you be mercilessly disqualifying opportunities that will be decided on price alone?
- Are you playing the same game as your competitors? If so, why? Would you be better served by taking your game to a new level, a level that your competitors will struggle to reach?
- How much are you a factor in your dream client’s decision? If you are not more of a factor in their decision, why not? What would you have to do to be more of a factor? Who would you have to be?