Yeah, some of you will be offended by the crude title of this post. I just couldn’t think of a better description of something that dominates too many selling conversations. It’s the pricing/cost discussion. Whether it’s the initial purchase, or the renewal/extension, we and our customers waste too much time in pissing contests about price.
We present our price, the customer’s moral obligation is to object to the price. Part of this is legit, part is positioning, a lot is that we’ve trained them to object because they know we will always capitulate and give a discount.
And we go back and forth, back and forth, back and forth. We resist presenting arguments justifying our price–too often it’s “We are cheaper than the alternatives…” Then we go back and forth, “I have to go back and check with my manager….” And we go back and forth, “OK, if you give us the order by the end of the month….”
We get into these cycles because too often, we’ve made the deal all about the price/cost. As a result, we have nothing else to talk about or to defend one position or another.
We and our customer forget about why they are buying in the first place. They are buying to solve a problem or address an opportunity. And the need to address this far surpasses the pricing squabbles that dominate our discussion.
Too often, we don’t know or understand what they are trying to do and why it’s important. The customer has gone through their change/problem solving process, basically made their decision and are looking choosing between alternative products. We compete against the products and their pricing, having little understanding of why they need to buy in the first place. As a result, when we get to the pricing discussions, we have little basis to defend our pricing and customer requests for something different.
Sometimes, when we know what they are trying to do, why it’s important, and the impact of addressing the issue, we (us and the customer) get distracted when we are in pricing discussions. The discussion becomes all about pricing and discounting. We forget that whatever pricing difference we talk about is dwarfed by the impact of completing the project.
Some years ago, a client asked me to do a project. I presented the proposal, the expected results, and the price for doing the work. For some reason, the customer thought he deserved a 15% discount. He couldn’t tell me why, he just felt he deserved it, apparently other consultants had always met his demands for discounts.
I told him, a politely as I could, “For every month we wait in starting this project, you lose a potential $40M in revenue. I can wait.”
He paused, looked at me, started laughing. He said, “I’m being silly. I got so focused on the contract price I forgot how important this project is to us. Let’s go ahead with your quote.”
It’s easy to understand how pricing/cost can be distracting to both sellers and buyers. And if we allow ourselves to get distracted, we get into the inevitable pissing contest about price/cost. We want the price we think we deserve and the customer wants the price they think they deserve and we stall out.
The only reason the customer is doing this project is to solve the problem, address the opportunity, and produce the expected results. Don’t let the pricing discussion distract either of you from that goal.
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