Deliver on the Denominator to Deliver Real Value

Raise your hand if you’ve ever been put on notice by a prospect—right up front—that they won’t be buying unless they get a terrific price.  (I know every hand went up… I’m clairvoyant.) “Right up front” is the key phrase that guaranteed all the hands would go up, but more on that in a moment.

Ready for a Fight

It’s not that every prospect acts that way, but enough do so that every salesperson has heard it. Many of you tell me you hear it every week!  A lot of prospects think it’s their duty, their job, their role in the great game of negotiation to announce up front that nothing is more important than getting a low price or a good deal. Their purpose, not unlike a boxer’s, is to put you off-balance and make you more vulnerable to their next punch. But it’s not every prospect, is it? It’s telling which prospects typically make these threats and which don’t.

The Prospects

There are three basic types of prospects you encounter out there. The likelihood they’ll threaten you depends greatly on their role:

• Technical decision-influencers—typically the organization’s official negotiator or purchasing agent—are most likely to put you on notice that they only buy when it’s dirt-cheap.
• User decision-influencers—those in the organization who would benefit from, or possibly suffer from, the purchase—are much less likely to issue those up-front warnings.
• Decision-makers—those ultimately responsible for the performance of the purchase and its role in furthering the organization’s goals—almost never behave like that.

What are You Really Selling?

If you sell a commodity, a product or service that’s virtually indistinguishable from what’s offered by your competitors, it’s tough to avoid sharp price competition. Indeed, what you sell is already perfectly understood by the buyer, and there’s really little else to discuss other than price. If you were the prospect, you might issue that same warning up-front that you only buy screaming good deals.

But if you sell tailored solutions, then your prospects know that there are two critical halves in the true-cost equation. The price paid is just one. It forms the numerator in the value equation. The benefits delivered, the ROI, form the denominator. A low cost is achieved in one or both of two ways: By decreasing the numerator (price) or by increasing the denominator (benefits).

The Solution

Prospects know there’s often only a little room for you to wiggle on price, but that a tailored solution developed collaboratively between vendor and prospect can magnify, even multiply, the benefits delivered.  That’s why Users and Decision-makers are more interested in the denominator, in tailoring the potential solution and improving the benefits, to come up with an attractive “low-cost” deal.

You’re more interested in delivering on the denominator, too. When you improve the solution and enhance its value, you set yourself up for success in two essential ways:

• You make price concessions on the numerator less important.
• You deliver a superior solution that makes it more likely this business will continue.

Every salesperson ultimately decides for himself whether he or she will spend their time with purchasing agents, focusing on the small negotiables in the numerator—or with Users and Decision-makers, collaborating on a solution that boosts the benefits and value in the denominator. I can tell you there’s more fun and more profit when you deliver on the denominator.

Use either our Results or Retention Checklist with every client that will be measuring results. In other words, every client. Become famous for Results, and you’ll no longer face much pressure over Rates.