Ask any sales rep why they won a deal and they will answer with a variety of answers. They will say they won because of relationship, a great demo, out selling the competition, etc. They will never say they won because they were the cheapest price. No one ever comes back to the office, rings the bell, and says "I won because I was the lowest price."
However, ask a sales rep why they lost and 9 times out of 10, they will say...you know it... price. The fact is no one ever wins or loses because of price. There are always, always other factors involved. Sure, price may be one of them, but it is never alone. Everyone who has been in sales for any period of time has gotten both of these calls from a customer at some point:
Call 1 -- "Hey Ed, this is Jim, we are ready to buy, but I need you to be at price X. Get me that price and let's get the paperwork done."
Call 2 - This "call" is often an email, because customers don't want to tell you that you lost in person. "Hey Ed, this Jim, we decided to go with your competitor. Sorry Ed, you did a great job, we just felt it was best for the company and they were cheaper."
Why do you get Call 1? Because you have done a number of things right. Most likely, you have established a relationship better than your competition and demonstrated greater value. You have earned the right to get this call and understand the REAL price point at which the customer will buy.
Why do you get Call 2? Because the competition has done a better job, has a better relationship, and earned the right to get Call 1 instead of you. Notice in Call 2, he told me the competition was cheaper. Often that is either a lie, or an expression of the fact that he shared the buying price with someone other than you. No one buys on price alone.
Now that we know it is not price that wins...why do you win or lose? To win your reps must do the following four things:
- Establish credibility and relationships with the right level of decision maker.
- Understand your customer's business issues and requirements.
- Present the right solution to meet the customer's requirements.
- Convey your value proposition effectively. In other words, do a good job of selling and not a bad job of selling.
10 Sample Steps -- In no particular order
- Account research done prior to first call
- Proposal presented to the decision maker
- Customer has been qualified for credit and chosen method of payment
- Demonstration has been attended by the decision maker
- Customer's business issues have been identified, documented, and agreed to by the decision maker
- Time frame to make a decision has been identified and agreed to by the customer
- Customer has agreed that the proposed solution will solve their business issues. This may be done via a business case, return on investment exercise, or some other method to establish proof of concept.
- Customer has contacted references
- Strategic resources have been engaged such as service, a vendor resource, a technical analyst, etc.
- Customer has attended an event or trade show with you.
- If a rep has completed less than 50% of the steps, your chances of winning are likely zero.
- If a rep has complete 50% to 70% of the steps, you likely have a 50/50 chance of winning.
- If a rep has complete 80% of the steps or greater, you likely have an 80%+ chance of winning.