Fear of Discussing Price

"Just don't mention price. I did it once, but I think I got away with it." - a paraphrasing of Basil Fawlty.

I have been working lately with a few sales teams where the topic of discussing pricing during the sales process has come up. Or rather, the strong desire to avoid discussing price until the very last minute has come up. These teams have pushed back strongly against the idea of introducing pricing – in any format – into the conversation until the customer absolutely demands it.

And, I believe, their sales are suffering because of it.

In a customer-centric sales approach – where we consider what is going on inside the customer’s mind and their needs, not just our own sales process and goals – it is important to recognise that any buying decision is a complex and multi-phased decision. Successfully giving the customer what they need at that point will help advance the sale. But customers’ needs vary at each stage.

In the initial phase, when the client and the supplier (you) may still be working out what a solution might look like, or what the problem really is, the client organisation needs to become convinced that there is a big enough reason to change. The reason might be lost sales, operational inefficiency, poor quality, etc.

(For those of you who follow Imparta’s Creating Client Value approach, you’ll know I’m talking about clients in the Awareness of Needs phase.)

Once key people are onboard with the need to change, there generally needs to be an approval from someone higher in the client organisation, a Centre of Power, for the idea to move ahead. This does not mean that the supplier might be awarded the deal! At this point, the client is merely saying, ‘Yes, this is a big enough opportunity that it makes sense for my team to spend time and energy looking into it, to pick the right supplier and the right approach.‘

As we’ve discussed in previous postings, decisions are being pushed higher and higher in the organisation. But many sales organisations are not recognising this key fact, and their proposals at this point focus on technical specifications, company capability and generic suggestions of business impact. Fees and implementation costs are left out of the discussion; they fear that they will get locked into that price, even as the solution evolves with continuing discussions.

And that’s where these sales organisations lose out.

Clients at this point, in order to make a commitment to moving ahead, need to see clear business logic – a Value Proposal in our parlance. Again, let’s remember that this decision is being made by a more and more senior audience, so their interest in the details of the solution is likely to be much less than the overall impact on the business performance. So a successful salesperson needs to be able to talk about – and show quantified examples of – the business impact. Consider the strategic impacts – sales growth, improved customer retention, etc – as well as more tactical issues such as productivity savings.

This impact, though, MUST be coupled with the costs to get that impact. If you’re saying that your solution can help create $5 million in additional sales, it absolutely matters to the client whether it will cost them $4 million to get that impact or $1 million. And the costs should be complete – if there are implementation costs associated with the solution, then include them. Consider the impact of leaving these additional costs out: eventually your client will realise that they exist, and if you haven’t revealed them your trustability quotient is likely to be hampered.

Senior audiences expect to see Impact and Costs to be able to assess the total Value they’ll be seeing. Doing so will increase the speed of your sales process, and increase the likelihood that an account will commit to the idea and move ahead in their buying process. Lots of our accounts (before we start working with them J) have genuine opportunities that have fallen dormant because of their inability to present this simple Value = Impact minus Costs argument effectively.

I am NOT suggesting that a consultative sales person should pull out a price sheet early and often. The key point here is that price can’t be ignored, but the key corollary is that price must always be discussed with a senior audience in the context of impact. Price on its own shifts the conversation to discounts. When paired with knowledge of how your solution will impact their business, it can become a discussion of how to move forward!  

So, review your opportunities and consider which ones are at this point: key people within the business support your idea or solution, but you can’t get their boss – or their boss’s boss – to buy in. Make sure that the costs are all in there, and that you can show true Value, and you just might move it along!