If you ask any group of salespeople the reason they lost a recent deal, the vast majority will lay the blame on a lower-priced competitor. When you ask that same group how they chalked up their last win, they’ll tell you it was their relationship, the trust their client had in them, their knowledge or some other way they created value for the client.
So why is it that when we lose, we blame price, and when we win, we credit anything but price? The answer is that price wasn’t the deal-breaker. You really lost the sale because you didn’t create enough value to seal the deal (or you didn’t help your client perceive the difference).
Yes, I know some customers are solely driven by price: They will buy only the lowest-cost option because price is the only way they measure value. But that is a very small percentage of buyers. Most buyers know that cheapest and best never go hand in hand.
Here are the three key reasons that sales slip away:
You lose deals when you don’t create value through the sales process. One way you misfire is by following the buyer’s request-for-proposal process. The reason: That process eliminates your ability to create value because you’re handling the transaction at arm’s length and can’t get close enough to fully understand your client’s needs. Visit the site, call contacts to follow up and dig in some more to learn the client’s real challenges. Then bring on your solutions!
You lose deals when you don’t differentiate your offering. If your solution costs more, then it probably also delivers a better outcome. For your clients to perceive that difference, you have to explain how the investment they make by paying more will translate into better results. And more important, you have to help them understand how investing less prevents them from producing the better outcomes they need.
You lose deals when you don’t develop vital relationships. Deals are much more difficult when you lack relationships with the contacts working at client companies. The most powerful forces in business and life are invisible: relationships (which are built on two more invisible forces, trust and caring). Simply put, people buy from people they know, like and trust. And the lack of these intangibles, these feelings, is one of the fastest ways to lose sales.
Some people believe that matching their competitor’s price would make it easier to win. But if matching your competitor’s lower price would deliver a win, why wouldn’t you match a competitor’s price when it is higher? The answer: because it isn’t price—it’s something else.