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Sales Tips: How to Respond to “Best and Final” Pricing Requests

By John Holland, Chief Content Officer, CustomerCentric Selling®

How should sellers reply when they are not going to win a transaction but are asked for a “best and final” number? Some respond with the lowest possible price with the thought being they may be able to steal the business (unlikely) or at least make it a skinny deal for their competitors. It’s not a tactic I endorse.

I believe floating aggressive prices can come back to haunt sellers if and when the roles may be reversed in the future. It would be awkward if a seller’s customers got wind of pricing that was lower than what they paid.

best and final pricing

My suggestion when asked for best and final pricing is to ask:

“Am I the vendor of choice and is price the last remaining obstacle?”

  • If the person asking is not a decision maker, indicate that he/she, the decision maker, your manager and you would have to meet to see if the transaction could be completed.
  • If the person asking for better pricing says you are not yet the vendor of choice you can respond:

“It sounds as though you have more work to do in finalizing your decision. If I become the vendor of choice at that time we can all meet to see if we can come to terms. For now, let’s leave pricing as an open item.” 

Some positive things happen by taking this approach:

  • You avoid putting low ball numbers on the street
  • The “buyer” hasn’t gotten what he or she wants
  • It makes sense for both parties not to negotiate unless you are Column A

Always and never don’t usually apply to sales, but my suggestion is to always act as though you are Column A when asked for better pricing. If you are, buyers will come back to you. If you’re not, you keep your dignity by not getting dragged into a discounting death spiral.

Sales Tips: Who Is Calling On Whom?

By John Holland, Chief Content Officer, CustomerCentric Selling®

Geoffrey Moore has written several books on product life cycles and when different types of companies are likely to buy.

  • Early market buyers comprise about 15% of a buying population. These companies want to be on the cutting edge of technology and can endure product pitches, determine how they can use offerings and make quick decisions. They don’t need a long list of references, reassurance nor much help from sellers. They buy quickly. If offerings fail to meet expectations they view it as a cost of doing business and are onto the next offering.
  • 85% are mainstream market buyers comprised of the early majority, late majority and laggards. They buy only after offerings have received market acceptance. They are cautious in wanting to avoid making mistakes so that “no decision” is a common outcome of their long buying cycles. Unlike early market buyers, product pitches will fall on deaf ears. This amounts to inept sellers calling on buyers that don’t understand how offerings can be used

Calling on Executives

A survey by Sales Benchmark Index found 87% of sellers are B and C Players. If you do the math (.85 late market) x (87% B/C Players), you realize:

74% of the time you have sellers leading with product to buyers that are unable to see usage and value.

It shouldn’t come as a surprise that after exhausting early market buyers many companies struggle to get their share of the mainstream market business. In a single word the difference between A vs. B/C Players is patience.

A Players uncover desired business outcomes, help buyers understand the barriers to achieving them by doing a diagnosis and then present only relevant capabilities that address the barriers.

Companies that codify and teach B/C Players to emulate calls A Players make can increase and accelerate revenue from the mainstream market. It amounts to migrating sellers from product to business outcome sales.

Sales Tips: Avoid Negotiating with Buyers Unless You’re “Column A”

By John Holland, Chief Content Officer, CustomerCentric Selling®

A common ploy buyers use toward the end of buying cycles is having someone (often a non-Key Player) request a “best and final” pricing. Smart buyers with multiple vendors in the mix will negotiate with Column C to use their price against Column B, all in an attempt to get the best possible price from Column A, their vendor of choice. Some buyers may just fabricate pricing.

Some salespeople see this as an opportunity to win the business with aggressive pricing. In my experience, vendors selling non-commodity offerings can seldom discount their way into becoming Column A.

sales negotiation tips

In selling, the words “always” and “never” seldom apply but I’d like to make a case that sellers should always negotiate as though they were Column A.

When asked for a “best a final” I suggest asking the buyer if you are the vendor of choice and if price is the only obstacle.

  • If you are told the buyer is not yet to that point, consider responding as follows:It sounds as though you haven’t finalized your decision yet, so let’s leave pricing as an open item. If I become your vendor of choice we can see if we can come to terms.

If the person asking for a better price is a non-Key Player, try to avoid negotiating with a messenger. When asking if you are the vendor of choice, suggest that if you became the vendor of choice you’d have to get your manager and the Key Player involved in finalizing the transaction.

  • If you aren’t the vendor of choice you will at least kept your dignity and pricing in tact. Any number you provided would have been used as leverage with Column A. If you are the vendor of choice they will come back to you and you start at the original price quoted rather than a discounted best and final they will try to further whittle down.

Sales Tips: Beware of Your Adversaries

By John Holland, Chief Content Officer, CustomerCentric Selling®

Committee decisions are exponentially more difficult than single buyer transactions. They are longer buyer cycles and by nature more strategic.

Conversations with first-line managers often identify roles of different people involved in decisions:

  • Who are your coaches that will provide information and do internal selling?
  • Who is your champion that will provide access to Key Players?
  • Who are beneficiaries that see personal value if a buying decision is made?
  • Who will be responsible for implementing the offering being considered?
  • Who will provide funding?

Many internal conversations focus on people that are in the seller’s camp, but I suggest being aware of potential adversaries that prefer a competitor’s offering. These buyers will work as hard as your advocates to steer buying decisions.

head in the sand

Ostriches are known for putting their heads in the sand when in danger. So it is many sellers choose to ignore adversaries.

I suggest:

  • Make attempts to win them over.
  • Failing that, try to neutralize their influence on the ultimate decision.

Having a conversation with your champion about adversaries and how to deal with them can be critical to winning. There may be times when one on one calls won’t be productive and it would be advisable to ask a champion or coach to accompany you on a call with an adversary.

Committee decisions when everyone agrees on the same vendor are rare. Try to evaluate how high in the organization your champion is vs. your competitor’s champion. Execute strategies to win over or neutralize your adversaries.

Sales Tips: Why Do a Demo?

By John Holland, Chief Content Officer, CustomerCentric Selling®

With the advent of online conferencing, the cost of doing demonstrations is considerably less than it was decades ago when sessions were done either at customer or vendor sites. The question I’d like you to consider:

What is the purpose of doing demos?

When and Why Do a Demo?

In my opinion, the only reasons are to prove relevant capabilities or to do proof in exchange for access to other people that would be involved in buying committees.

Please note: Prior to doing demos, buyers should have visions of the capabilities they need to achieve their desired business outcomes. If need development has not been done, the result will be dreaded “spray and pray” demos where buyers are subjected to a barrage of features that are not relevant to them.

Ultimately, demos don’t sell, salespeople do.

People asked to do demos should be provided the following information:

  • Names and titles of attendees
  • The desired business outcomes of the prospect company
  • Barriers to achieving the outcome (shortcomings in their current environment)
  • Capabilities that address barriers that must be shown to the buyers

Keep in mind demos are proof of the capabilities sellers have helped buyers realize they need.

Sales Tips: Setting the Pace with Buyers

By John Holland, Chief Content Officer, CustomerCentric Selling®

It seems that salespeople are always trying to speed up sales cycles. Part of it I suspect is due to the monthly, quarterly or annual pressures salespeople and their managers deal with on an ongoing basis. My general experience is that:

  • Opportunities that are likely to close move at a fairly brisk pace.
  • Those that plod along seem to slowly lead to buyers making no decision.

setting pace with buyers

Start with a SOE

After gaining access to buying committees for large transactions, we suggest negotiating a written sequence of events (SOE) that defines the steps that need to be taken to make a written understanding of buyer needs and the recommendation and pricing to address them.

If buyers agree to the SOE, there are three (3) things that sellers should do:

  1. Ask if this is the right time to commit the efforts and resources needed to evaluate the offering being considered. If, for example there is a pending acquisition, key position that isn’t staffed, reorganization, etc., it will be difficult to proceed with the evaluation and sellers may be better served to resume when the timing is better.
  1. Ask the buying committee their timeframe as to when they would like to receive a written proposal. This allows sellers to align with buyers and remove the temptation to focus on a seller’s agenda (i.e. quarter or year-end) to recognize revenue.
  1. A potential accelerator can be created if value can be established with as many Key Player goals as possible. If these buyers can quantify improvement from baselines (where they are without the offering being considered) the committee may recognize there is a cost of delay.

After potential benefits have been recognized, buyers are incented NOT to drag their feet in doing evaluations.

Save the Infographic below for easy reference:

INFOGRAPHIC_How to Set the Pace with Buyers

Sales Tips: Losing Slowly – 6 Signs That All Is NOT Well

By John Holland, Chief Content Officer, CustomerCentric Selling®

You would enjoy a lavish life style if you were on the PGA tour and finished second in each golf tournament you entered. In stark contrast a salesperson that came in second on every opportunity would have to live on their base salary and make frequent job changes. By its nature selling is a winner take all proposition. There are no parting gifts or consolation prizes.

During a workshop I taught, a CEO had an epiphany he shared with his team:

Most of his salespeople had an annoying habit of losing slowly.

warning-signBy that he meant they worked on many opportunities that had little chance of closing. These deals remained in their pipelines (pipe dreams) to make it appear as though the numbers could be made.

Sellers ultimately must decide which opportunities to pursue. Competent sellers understand the difference between activity and progress.

The worst possible outcome of sales cycles is going the distance and losing, whether it be to another vendor or to no decision.

In many cases, sellers fail (or are afraid) to see signs that all is NOT well:

  • Buyers already had budget in place, often provided by “Column A” vendors
  • Buyers already had determined their requirements
  • Sellers had limited or no chance to influence the requirements list
  • Sellers couldn’t gain access to Key Players
  • Sellers couldn’t establish value
  • Proposals issued months ago hang in their pipelines

Many sellers fail to realize buyers may need pricing/proposals from other vendors to make comparisons or to leverage pricing to get a better deal from the vendor of choice.

If access to Key Players isn’t granted, sellers do have the option to say they are unable to make a recommendation without first understanding the needs of Key Players.

This can become a “quid pro quo” of gaining access in exchange for submitting a proposal. If buyers refuse to grant access, it allows sellers to lose more quickly and look for better opportunities to work on. This is consistent with the core concept of “bad news early is good news.”

A question for your consideration: Over the last 12 months, how many opportunities have you chosen to walk away from? My hope is that the time you would have spent losing could be spent finding winnable opportunities.

A final parting thought: After Column A is awarded the business, Columns B, C, etc. are often told they came in second. It’s the most expedient way to let them down without rehashing why they lost.

When in doubt, save the below infographic for easy reference:

INFOGRAPHIC_6 signs that all is not well

Sales Tips: 5 Steps to Quantifying Value for Buyers

By John Holland, Chief Content Officer, CustomerCentric Selling®

In initial calls it is important for sellers to conduct them in a way that helps buyers conclude they are sincere and competent. In my mind these are pre-requisites for having buyers share their business goals (or problems) so that potential value can be determined.

establish value

Once a goal has been shared, sellers should try to perform these five (5) steps to quantify value for buyers:

  1. Establish base lines. For example, if a VP of manufacturing wants to reduce scrap a seller should ask what percentage of production must be scrapped and/or what dollar amount that represents.
  1. Ask questions to determine if there is a trend and that by projecting a year ahead buyers could see increased benefits. Sellers can pose questions such as:
  • What was your percentage of scrap last year?
  • Have scrap percentages been increasing?
  1. Help buyers understand the barriers to achieving the goal that can be addressed by features or capabilities of the offering being discussed.
  1. Based upon the barriers the buyer shared, offer the specific capabilities that address them and ask if they would empower them to achieve their goal.
  1. If a buyer agrees, the seller can try to quantify benefit by asking: If you had these capabilities how much improvement do you think you could realize?

Remember: Establishing value can be a competitive differentiator.

Sellers that focus on goals, baselines, trends and quantifying improvement can instill a greater sense of urgency to take actions that can result in higher win rates.

Save the infographic below for easy reference.

INFOGRAPHIC_5 Steps to Quantifying Value for Buyers

Sales Tips: Responding to “What Do You Sell?”

By John Holland, Chief Content Officer, CustomerCentric Selling®

A quick insight into how sellers view and position their offerings can be gotten by asking a simple question:

What do you sell?What do you sell?

It’s a question sellers should be prepared to answer whether in social settings or sales calls.

Many sellers feel this question is an invitation to describe offerings and launch into product pitches. This is due in part to the extensive product training they receive, but responding in this manner isn’t likely to get conversations started. It shouldn’t come as a surprise that leading with product is unlikely to move the ball forward.

If I were asked what I sold and responded with: I provide sales training and consulting, it could elicit the following reactions:

  • A yawn
  • What type of training do you do?
  • How much does your training cost?

None of these responses is headed in a positive direction. I suggest any references to offerings should be avoided.

In 20 words or fewer, share an outcome that you help clients achieve.

In my case it could be:

I help organizations identify and share best practices of their top performing salespeople.

It won’t always lead to conversations but I’ve succinctly answered the question and am more likely to have discussions about outcomes before any product discussions.

You may want to create a positioning statement so that you’ll be better prepared with an answer to what should be an innocuous question.

Sales Tips: 4 Components of a Repeatable Sales Process

By John Holland, Chief Content Officer, CustomerCentric Selling®

Henry Ford is credited with creating production lines allowing cars to be built consistently regardless of the staff that assembled them. I’ve worked with consulting companies that wanted to “cookie cutter” engagements because repetition makes people more competent and efficient. It provides the added benefit of being able to identify and share best practices.

repeatable sales process

That said, many people feel sales calls are like snowflakes in that no two are identical. While calls are never identical, there are ways organizations can make them more consistent by defining parameters to provide context.

  1. One of the key components is creating sales ready messaging®:
  • As sellers go higher in org charts, calls become more predictable, largely because the primary focus shifts from offerings/products to desired business outcomes.
  • By leveraging the collective expertise of internal resources, vendors can identify the high level titles sellers must call on to sell, fund and implement a given offering. Many sellers find it helpful to understand what titles they should target.
  • Once titles have been identified, menus of business outcomes or goals can be created for each potential member of buying committees. Ideally the value of achieving the desired outcomes should exceed the cost of the offering. The start of buying cycles can now be defined as a particular title sharing one of more goals from the menus that were created.
  • Each title/goal becomes a conversation sellers should be able to execute. To help them position offerings consistently, Sales and Marketing (and other departments with relevant input) can map only those features/capabilities that are relevant to a title achieving a specific goal.
  • Once the features/capabilities have been defined, packets of diagnostic questions can be created for each capability. These questions allow sellers to uncover needs based upon buyer answers to diagnostic questions. Sellers can then offer only capabilities relevant to achieving the desired outcome. This approach allows sellers to clarify buyer needs and avoid discussing extraneous features/capabilities that would actually be distractions.

I’ve briefly described the process of creating sales ready messaging® to gain more consistent positioning of offerings.

Once messaging has been created, three other components are needed to facilitate consistent execution:

  1. Sellers need a common set of skills. The elephant in many offices when managers try coaching sellers is that they ask them to perform tasks they don’t know how to execute. This makes them likely to fail.
  2. Milestones for different types of transactions should be defined. The steps should vary based upon the size and complexity of offerings. One size does not fit all. Whenever possible, achievement of milestones (based upon sellers executing messaging) should be determined by buyer actions rather than seller opinions.
  3. After executing sales ready messaging® prompters, sellers can imbed answers to five debriefing questions in correspondence to buyers. These letters or emails allow managers to ensure opportunities are qualified and grade the pipeline.

In order to have sales process defined milestones, consistent positioning of offerings, a standard skill set and the ability of managers to audit pipeline by reviewing correspondence with buyers are required. Sharing best practices can provide organizations sustainable competitive advantages.