The harsh realities of selling in today's complex markets means you must change the game
“My Sales Manager was so upset. I literally thought she was going to fire me on the spot. I had to make that call that we were going to lose the deal with a potential customer we had been targeting for months because our prices were too high. I really did everything possible to position value, make the economic case, build the relationship, and do everything else they teach us in Sales Training school but it wasn’t going to be good enough because the customer had a specific budget that he could not go over. He wanted us to get the business but unless we lowered the proposal price by more than 34%, he was going to give it to our largest competitor. It’s just brutal.”
I had this conversation with a potential participant of one of our Strategic Business Selling programs. The Sales Professional I spoke with shared the new and harsh realities of selling in today’s complex business environment where potential customers have more access to information about your company, your competitors, your products, and how other customers were able to solve their needs in the blink of an eye. Decision makers are smarter, more educated, and know exactly what they want and are able to leverage the data into deep price negotiations systematically cutting out the chance to deliver a unique value proposition. The bottom-line is that it’s a different world and despite what your organization thinks, sales professionals don’t wake up every morning planning to give deep discounts. They are victims of a system that has changed around them and left them without the skills and tools needed to survive.
From an organizational leadership perspective, you only have three choices here:
- Give in and take whatever price you can get
- Don’t discount and walk away from low price deals
- Change the rules of the game
There are positives and negatives for each, and I will explain a few tips to think about below…
Give in and take whatever price you can get
This is what most companies do and then they get angry at their sales team. They figure some revenue is better than no revenue and depending upon what industry you are in the low-priced business can potentially spread manufacturing costs or personnel costs.
Don’t discount and walk away from low price deals
This is a lot harder to do. It requires a lot of discipline and it assumes you will be able to find other customers who are willing to pay full fees. And there is a chance they don’t actually exist anymore.
Change the rules of the game
This is an intriguing and innovative approach to the challenge. Instead of fighting a system that you may not be able to win, change the rules of the game. If customers have smaller budgets and are spending less, then the only way for your organization to make a profit is to lower your costs. That’s what we teach you in Business Acumen 101! You can lower your costs through increased efficiencies, enhanced operational effectiveness, or by reducing your sales and marketing costs. Most business organizations spend about 30% of their revenues on Sales and Marketing. But what if you could get the same or better effectiveness with only a Sales and Marketing budget that equates to 20% of Revenues? Digital Marketing is a transformative method of reducing costs and increasing effectiveness. What if you only focused your sales force on top, high revenue accounts and left the low revenue, discounted accounts to automated digital marketing?
In summary, sales professionals mean well and want to do a great job. The game has changed on them, so it’s up to you to change it further in a way they benefits them and your company.