How Your Sales Force Can Justify Higher Prices
It’s more difficult than ever to win new business. It’s more competitive than ever, too. And if it’s difficult to make the top line grow, it is even more difficult to make the bottom-line grow. And just try growing both the top and bottom lines at the same time.
Globalization means we’re now competing with smart people from around the world. Disintermediation (the removal of intermediaries in a supply chain) means many of us are competing against technology that lowers the transaction cost to almost nothing. And a decade that started and ended with deep recessions increased the power of purchasing managers and placed the focus of many businesses squarely on controlling costs, including many of your clients and your prospects.
If you didn’t know better, you'd think that price was the only thing your clients value. But this isn’t true. And selling as if price is value ensures that you are neither different nor compelling to your prospects and clients.
There is a way forward that has nothing to do with lowest price. That way forward is through creating a higher level of value, a level of value worth paying more to obtain. That way forward is value creation. Value is the killer app.
Why You Aren’t Different
So many sales organizations chasing the bottom by competing on price has caused buyers to perceive that you are completely undifferentiated. And who can blame them for this perception. Salesperson after salesperson has walked through their doors, promised to create even greater value at an even lower price, and failed to keep that promise. Buyers switched from one supplier to the next believing that they could actually obtain something of greater value at an even lower price. Over time they’ve come to the conclusion that “you’re all the same” and that nothing you might recommend is worth paying more to obtain. The promise of greater value at ever-lower prices has hastened the commoditization of many industries, maybe even yours.
The differences that make a difference for clients cost more. The real business objectives your clients need help with aren’t easily obtained or some crafty sales organization would’ve already figured out how to do so at the lower price they promised. The differences that make a difference for your clients should cost more. In fact, they must cost more if you are to execute and produce results.
You create a perception of being undifferentiated when your prices are undifferentiated. You feed that perception when you promise more for less; you sound like all of the salespeople that have darkened your prospective clients doors for the past decade.
No one in their heart of hearts believes they can have a greater value at a lower price. Your prospective clients are waiting for a real partner to help them justify making a greater investment for a greater return. Creating value makes you different.
Why You Aren’t Compelling
The reason so many buyers don’t buy is because the offer that they’re presented with isn’t compelling. It doesn’t solve a big enough problem. It isn’t tied to their most strategic objectives. It doesn’t do enough. We accuse our clients of being complacent. But we should indict ourselves first.
Are you solving the biggest, nastiest challenges your clients are facing? Are you helping them with their most strategic opportunities? Are you helping them create a gap between them and their closest competitor?
It’s difficult to be compelling when you play low. It’s difficult to be compelling when your only promise is to do what the last sales organization promised to do at an even lower price. Unless and until you can move the level of value creation to something more strategic, you aren’t going to be compelling.
Compelling means there’s an urgent reason to take action. Compelling means time is of the essence. Compelling means the risk of loss is so great that you absolutely must act now. Shaving a few points off of an already low-price isn’t compelling, unless your prospect’s very survival is at stake.
The reason value is the killer app is because the greater value you create the more you differentiate yourself from your competitors. Value is also more compelling than price.
Anthony Iannarino is an author, speaker, and entrepreneur. he has been named one of the top 25 most influential people in sales by both OpenView Partners and Top Sales World. Anthony writes for the magazines SUCCESS and ThinkSales, as well as daily at thesalesblog.com.
What about you? How does your sales force justify higher prices? How do you create value for your customers?