When a seller says a lower price will win the deal, price isn't the problem. Value is. Here's what managers and sellers should ask before anyone touches a discount.
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If you prefer to read - here is the transcript:
Something I hear often from sellers is simply this: "If we can get our price down, we can win this piece of business." And immediately I know we've got a bigger problem than that.
It's not about the price. It's not about the negotiation. It's because price is the only point of leverage we have right now, because the seller and the buyer haven't uncovered the value and the return on investment that's important to the buyer.
So for all the managers out there, when you hear this from your seller, I want you to go back immediately and work to requalify this opportunity with your seller:
• What value are we bringing?
• How have we operationalized that?
• Who else is affected by that value?
• Has the customer agreed on that value, that return on investment?
And if you're a seller, I want you to sit back, give yourself some sober second thought and think: Why am I asking for this discount? And why is the customer asking for this discount? Have they commoditized us? Do they really understand the value? And have we done a good job of monetizing and quantifying the value that the customer can get from a full price implementation of our solution?
My guess is that you probably haven't done that job. Sorry for the tough love there, but it's the most common mistake that I see in closing more business.