In today’s rapidly changing market landscape, buying decisions are made long before any sales rep is contacted. When you’re finally are being contacted, the only question still left to be answered is the one of price.
My question is: If you’re a sales rep, why bother spending your valuable time on building any relationship if your prospect already has done all evaluation beforehand and only has this single question to you?
No reason at all.
Why not just publish your pricing on your web and you get rid of that last question as well?
Perhaps, I’m starting a revolution within The Sales Community. But I’ve got this topic on my mind for so long. Now, I cannot bear it anymore; I’ve got to start this discussion. My excuses if I’m tend to be a bit provocative.
Some time ago I was planning to build a sundeck to our house. I did my investigation; what type of wood, construction and other materials that we needed. Finally I called a couple of lumberyards for prices. Lumberyards offer exactly the same goods, so pricing was the only thing to compare. I had my favorite – where I used to buy this type of stuff – so I started to call them. It was a friendly and nice conversation, but I decided to buy from a completely new supplier where I hadn’t bought anything from before.
Why? The pricing difference was just a few dollars? Why was the change to a completely new supplier so easy to make, without any chance for my existing supplier to control?
I’m sure the increasingly importance of price is a huge trend, and it’s not just about selecting local lumberyards. Look at the global brands. Ten years ago, I saw major differences between brands. In phone industry a great example comes from the story of Nokia. Technology was more or less the same – the goods was the same – but companies like Samsung or Huawei was lacking the value of a strong brand, which Nokia possessed. You bought the Nokia phone to belong to a hip community. Now, the Samsung brand is one of the strongest on the market and Huawei is the third largest phone company on the planet. Nokia doesn’t even exist anymore.
Look at the Car Industry and you’ll find exactly the same thing; the brand image gap is decreasing very fast and it’s accelerating. KIA, the Korean car manufacturer, was some years ago considered to be cheap and deliver low quality. Today, KIA is one of the fastest growing car companies in the world. Why? Because they are still cheap but it’s brand has recovered to be much stronger diminishing the gap to premium car brands at an accelerating pace.
Another example is Microsoft’s e-mail client Outlook. Only a few years ago, it was considered to be unbeatable and any attempt to get market shares were completely unfruitful. What happened? Well, many companies are now leaving for Google cloud suites and even Windows operating system are now under fire – new Google Chromebooks are all over the marketplace.
Why? Lower price of course.
The last ten years, companies have learned their lessons. Focusing on design, marketing, efficient processes and brand have almost taken away the only weapons available for sales reps to differentiate. In a very near future there will not be any gaps left to work with at all.
The core question is; why would you pay more for exactly the same delivery?
Soon; no reason at all. For now; well, let me pick some reasons you still may come around with a higher price.
- Your prospect is lazy
- Your prospect is afraid of change
- The change itself is costly
Your prospect is not doing any great research on current available solutions and they trust you to be the one to deliver the optimal solution for them.
But the compelling question is: Are there still companies with space in their bottom line to be lazy? If you’re lucky finding them today, certainly you’re not gonna find them tomorrow. So, be aware to change your price level before they are forced to be proactive and reshape their profitability.
Afraid of change.
Most companies manage risks. Even if you’re promoting exactly the same goods but to a lower price than all your competitors, you may lose your deal. That’s because the prospect sets a price on the risk. If they discover any higher risk doing business with you, they judge the risk within a price span, and if you exceed that span it turns out as a price of that risk. That price is put on top of your proposal. If you still are lower in price, you will get the deal but if not, you’ll lose.
In the same mindset, your prospect may add a price of change on top of your quote. They may have to rewrite manuals, set new routines in place, train people etc when changing to your solution. Nowadays, companies take a good look into changing costs much more than before. These “internal” costs is a little harder to collect and estimate but companies are doing more than a guess.
The challenge is to force yourself being lowest priced solution but still earn money. You have to find other sources to get paid. You need to be innovative or you’re out. Great brand creators have followed the trails of making buyers belong to lifestyle communities, but tomorrow you can’t lean on a great brand, since low-price companies have captured and closed the gap of brand value.
You may survive for some years if you are lucky to find companies that are lazy, afraid of change or where the change itself is too costly. But why wait just to die?
Act. Now. Remember: Why pay more for exactly the same stuff?