Perhaps this has happened to you at least once in your sales career: it’s your quarter close, and you’ve committed a dollar amount to management as your forecast. A big chunk of that forecast is based on one particular deal, but you’re confident it will come in because the prospect has already promised to sign on a set date. But when you call to close that opportunity, your prospect tells you apologetically that one of your competitors has come back with an unbelievable price point, and if you can discount your price to match theirs, he’s ready to do business with you today.
If we’ve previously helped the prospect see how we can deliver clear, incremental value over our competitors based on our unique capabilities, and the prospect has said that such value outweighs our pricing, we stand a much better chance of holding our price point and minimizing or eliminating discounts altogether. We simply circle back to our earlier discussions, reconfirm the value the prospect said they’d see in working with us, and if the answer is yes, we should be able to move forward with minimal or no discounting.
If, however, we haven’t helped the prospect see how our unique capabilities can provide incremental value over our competitors’ solutions, price then becomes our unique differentiator, and most likely we’ll end up negotiating and taking the deal just to meet our committed forecast.
So how can we do a better job of differentiating ourselves and anchoring enough value for our product or solution so that discounts become less of an issue?
ValueSelling is a pragmatic sales process that helps us identify what our prospects value and connect the impact of our products and services in the context of what’s important to our prospects. The ValueSelling questioning process provides four clear steps for doing just that:
1. First and foremost, uncover our prospects’ key business issues early on in our dialogue. In the ValueSelling nomenclature, a Business Issue is nothing more than our prospects’ #1 challenge or personal objective that keeps them from contributing to the bottom line of the company. Common business issues include: increasing time to revenue or market share, cost management, improving uality/reliability or improving efficiencies/productivity.
2. Probe for problems that stand in the way of resolving Business Issues – especially problems that we know we can solve better than our competitors. This requires knowing what you do better than your competitors, and then steering the conversation via probing questions to uncover these problems that you can resolve best.
3. Probe for our prospects’ view of capabilities that will enable them to resolve their problems and their Business Issue – and teer the conversation via probing questions that get the prospect to consider what having your unique capabilities will do for them. We call this process creating a VisionMatchDifferentiated®.
4. Anchor incremental value in the mind of our prospects for our unique capabilities by probing to help the client see what the business and personal impact will be in ultimately resolving their business issues. Key points here: uncovering the value associated with solving problems is a good thing to do, but uncovering the value associated with solving business issues creates much greater value n the clients’ mind. This is because business issues are typically the metric upon which our prospects are measured, and if we can make them appear successful based on that metric, we create enormous personal value for them.
Consider this example: one of our clients, who had previously been selling based on price as their key differentiator, made the above steps common practice in their organization. As a result, discounts were reduced by up to 50% within only three months. In addition, cost of sales was lowered, and productivity increased as well.
Of course, one can make the argument that even when you’ve executed well on the above steps, prospects can still ask for a discount for the sole purpose of bragging rights. If you suspect this is the case, consider three negotiation strategies to hold your price: 1) tradeoffs, such as pricing, terms and conditions, and deliverables; 2) embellishments, such as adding low-cost, high-value deliverables; and 3) compromise on some middle ground to hold your price point.
Reducing Your Discounts - Sell Value, Not Price