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Is it ever okay to discount so heavily that you are just “buying” the business? I think it depends. I am one who says sell your value and understand the value you bring to your customer. However, there can be a situation when it really is the best thing you can do with a bad situation. Here’s one example.
We were working with a prospect, who did not let us know until we got near the point where they wanted to make a decision, that there was an incumbent vendor with whom the CEO felt comfortable. Our contact told us, “The boss just feels good about them.”
So, after multiple attempts to reach the CEO, we wrote the following email to him (bypassing our contact):
Over the past few weeks, I’ve spoken with Ted multiple times about your research and requirements for an enterprise XXX solution. I wanted to reach out to speak with you directly about this decision, since it can be very strategic for revenue growth.
From our conversations, I understand some of the key considerations to be:
• Point 1
• Point 2
• Point 3
With our application’s compatibility with your application and the underlying systems platform, our solution seems to line up very well. I’ve also personally worked with companies in similar markets to yours, who have been very successful in using our product.
A couple examples of customers that have used our platform as a differentiator are XXX for asset management and YYY Software for inventory management.
When would be a good time to talk for a few minutes to discuss your goals for this project so we can help make it a success?
The CEO responded and said he was open to seeing a demo of our product. We did the demo and while he paid attention, you could tell he was not totally convinced. He also mentioned something about our price being kind of high. I took the price comment as an excuse for him to say, “At least I looked.” At the end of the demo he said, “We’ll get together as a team, go over everything and let you know.” Sure. We asked:
“What are the determining factors in choosing a vendor?”
Answer – There are a lot of things; functionality, price, development time.
Not once did he mention already using the other vendor and feeling comfortable with them, which we knew. At this point, we had a decision to make. Wait for the axe to fall or try to get something out of the deal. I typically choose the ladder. On a deal where the prospect is at least willing to pay for any labor costs such as Professional Services, and they do not eat up much or any of my time, I like to get what I can and become the incumbent. After a week I had my sales rep send the following email to the CEO:
Thank you taking time to view the features and benefits of our product.
It is our understanding ABC has been using, and feels comfortable with, . While may have a fine product and company, for , we have been told many times our solution is the best on the market.
Bob, we have decided to not let cost stand in the way of letting you take advantage of what many consider to be the best technology for . To that end, here is our offer if you are willing to make a decision this month:
For your system you will have:
- Bullet 1
- Bullet 2
Price – $X per month …… At this price point monetizing our solution with your customers should bring you an excellent, new revenue and profit stream.
We also suggest purchasing two days of Professional Services at $X per day, to make sure everything is set up correctly for maximum effectiveness.
Some may say, we are just buying the business or we must be desperate. Only the former is true. We are doing great. We are 121% ahead of where we were this time last year and have had double-digit growth over the last four years.
However, there are some cases where we see such a great fit, that we are willing to pay to have you as customer and help spread the word. Attached is our proposal.
We look forward to bringing you on board and making your new project a huge success.
No professional sales rep or manager wants to be in this position. However, you must consider all the facts.
• Are they going to expand their initial purchase down the road?
• Can you sell them add on’s later?
• Do you need reference customers?
• Is your company in a growth mode where you need critical mass?
Is this always the right approach? Absolutely not. But every deal needs to stand on its own and must be evaluated that way.
Sales training for Reps – Learn to really listen for what your prospect is NOT saying.
Sales training for Managers – Rather than just walk away, always consider what you can get out of the deal.