My post, “But Your Price Is Too High,” has spawned dozens of comments. One of the themes that has come up is “Walking Away.” We all know we are supposed to do it, but walking away is something we rarely do. It’s really not that simple to just walk away.
We’re supposed to walk away from bad deals, whether it’s because of pricing or other issues. But it’s far easier said than done.
As we work deals through the pipeline, we become emotionally committed to them. We’ve invested so much time, so much resource, we often fool ourselves. We believe our sheer force of personality, our “salesmanship,” the ability to leverage other resources will overcome everything. We believe in ourselves, our products, our companies and can’t imagine walking away.
Or we hang in there, we need this deal! We need any deal! While it’s a bad fit, we’re work on it because we have nothing else to chase. Our managers are on our backs. They need the business, we need the business, we forget our qualification criteria and chase anything that fogs a mirror.
Or we get into the final negotiation. It’s like being “4th and 1 yard to the goal.” We’ve come so far, we can just taste it, the customer tells us, “all you have to do is reduce your price by…..” or “throw this in and the deal’s yours….” We’ve done it before. It’s just a little lower than last time–we’ll do it just this one time.
Or there’s the wonderful coaching our managers provide. “You need to get this deal whatever it takes!”
Walking away is never as easy as it sounds, but we have to walk away.
“Wind fast, lose fast!” Walking away early is easier than walking away late. This is why qualification is so important. Better to disqualify those bad or marginal deals no matter how badly we need them. It’s far better to spend our time prospecting and finding high quality deals than to pursue those deals we won’t win–at least the way we want to win them.
We need to start positioning pricing, terms, conditions early in the sales process. What are the customer’s expectations in pricing? How will they justify this? What has been their past patterns or history in doing deals?
No price discussion should be held without being in context. Ideally, we’ve positioned pricing in terms of business value and the return they will get from this investment. Is the customer really going to forego all the benefits because you won’t meet their price?
“Well your prices is higher than the competition!” Have you failed to differentiate yourself? Things are NEVER equal. As much as the customer tries to make everything equal between vendors, so price becomes the differentiator, in reality they are NEVER are. It’s our jobs as sales people to establish our differentiation early on, to maintain and build it in ways that are important to the customer (not what we think is important.) It’s our job to make our solutions and ourselves the benchmark of comparison. Doing this in final negotiations is always too late.
But there are times we have to take pricing actions. We have to discount. Ideally, we remove value as we discount, but sometimes we can’t. We have to have a clear rationale for any discounts we provide–both for ourselves and with the customer.
We need to understand our walk away point. It’s easily said, but not easily done. This is where strong management and leadership is necessary. Managers and leaders must be 200% behind sales people that walk away from bad deals. They’re doing the right thing for the business. While no one likes to lose, it’s worse to win bad business.
If managers don’t set the tone, if managers don’t set the example, if managers beat sales people up for not getting a deal, “whatever it takes,” then eventually all the deals will be bad deals!
Walking away, as painful as it is, is good. It maintains the quality of your business. You work with high quality customers who value what you provide. Sales people should never walk away from a deal alone, but with the full support of their management.