Casual Articles - Instead of Discounting, Back Some Value Out of Your Proposal

1. When a company has mispriced their offering. Let's face it. Times have changed. Competition is fierce. And yes, as much as we don't like to admit it, prices and fees have been forced down in some markets. If everyone else is now selling what you sell for $1.00 and you're still selling it, just as you always have, for $2.00 and you can't prove you can deliver a dollar's worth of additional value for the customer, your pricing is too high--way too high. Call it a discount, or call it a price adjustment, in this situation you've got face reality and sell your products at a price the market will bear, or you won't sell very much at all.

2. As a token concession to close the deal. I don't see a problem with "rewarding" a buyer for signing an order within your timeframe, for example. Understand, I would much rather provide other concessions that don't cost my company money and don't educate my customer that whenever I am going to ask them for an order, I am going to give up part of my margin and commission. But I do live in the real world and understand that for my clients, pricing concessions are sometimes required to get the deal signed.

3. When you haven't done an adequate job of selling the unique business value your product or service will provide the customer. My clients will tell you I am never happy in a situation like this, but if you've not done the best selling job, and there is some room for a discount, and you need the deal, discounting may be better than losing the deal on principal.

How do you avoid discounting?

I talk a lot in my book, How Winners Sell, about the fact that to succeed in business to business sales today, you must sell business improvement, not products or services. That means differentiating yourself from your competition in the unique value you, your products and services, and your company can provide toward your customer achieving their corporate, divisional, business unit, department, or government agency goals. Have you transitioned into the mode of creating customer demand by targeting accounts--getting in before they know they have a need, and establishing yourself as a knowledgeable, trusted, and patient advisor? If not, you'll continue to be on the receiving end of all sorts of one-sided customer demands, mostly taking the form of answering requests for information, doing presentations, demonstrations, fighting the constant battle against having your offering commoditized by the customer, and being on the receiving end of strong demands for discounts. We've been taught over the years to bundle our products and services where possible to provide the customer with a single investment number. That way, we were told, they can't nickel and dime you, and can't slice up your offering, able to say no to pieces they don't want or need. But now times have changed and when you think about it, that's exactly what you want to do.

If you sell products or services that can be componentized, sold in pieces or modules, or in phases, you're potentially in good shape. Scenario You know your competition is going to come in with a substantial discount, as they have before. Your sales effort must include:

•Assuring yourself that the customer is not making a decision solely or primarily on price. This question must be asked again and again of key decision makers.

•Getting agreement from the real buyer that you understand their business objectives and that your offering can help them achieve those objectives. This method does not work unless you are dealing with the real buyer.

•Finding unique areas of additional value (on top of their existing requirements) that you can provide through the capabilities of your product or service offering.

•Management support for potentially selling part of your offering now, and the rest later on rather than selling the whole thing at a discounted price.

In cases where you know your competitors will be discounting, you'll need to offer several investment options to your customer. Alan Weiss, the consultant's consultant, suggests providing three opportunities for them to say yes.

If you offer your prospect three options to buy--let's say for the sake of labels, Platinum, Gold, and Silver--and you've done a good job of selling the business value of your offering--you can avoid having to concede more than a nominal discount. Your plan here should be not to discount, but rather to back value out of your proposal to meet the prospect's desired investment level. Presenting three options lets you do exactly that. The customer gets to determine how much they want to invest and will enjoy the resulting ROI associated with that level of investment.

Here are the three options:

The Platinum Option

•Gets the customer what they need (and want)

•Highest level of investment. You might ask for a 10-30% premium over the Gold level for this option, depending on the value you believe you can deliver to the customer.

•All the features, modules, components, capabilities available

•Your best resources

•Quickest time to value

•Priority service -- A special 800 number, top of the queue, 24 x 7 x 365

•The highest ROI

•Other perks, such as quarterly meetings with your CEO, special invitation events, input into your product development plans

The Gold Option

•Gets the customer all of what they need (and a few wants) What is Security?
I have found that Security is defined in many ways, and often misunderstood. Most will agree that Security is about the protection of people and assets. Many will see Security as primarily a proactive discipline dedicated to the effective prevention of losses, threats and other compromises; with a response component to properly react to and mitigate the short and long-term harm of actual loss incidents.Furthermore, Security is often considered that which:- Provides a reasonably safe place to those who enter and use the facilities, including customers, employees, vendors, students, patients, visitors, tenants, etc.- Reasonably minimizes risks of security-related litigations and negative publicity- Adequately deters and monitors those who may wish to do harm- Prudently and effectively responds to the actions of intruders, thieves and other wrongdoers- Fosters a feeling of safety and security among those who legitimately use the facility- Maintains ssion to close the deal. I don't see a problem with "rewarding" a buyer for signing an order within your timeframe, for example. Understand, I would much rather provide other concessions that don't cost my company money and don't educate my customer that whenever I am going to ask them for an order, I am going to give up part of my margin and commission. But I do live in the real world and understand that for my clients, pricing concessions are sometimes required to get the deal signed.

3. When you haven't done an adequate job of selling the unique business value your product or service will provide the customer. My clients will tell you I am never happy in a situation like this, but if you've not done the best selling job, and there is some room for a discount, and you need the deal, discounting may be better than losing the deal on principal.

How do you avoid discounting?

I talk a lot in my book, How Winners Sell, about the fact that to succeed in business to business sales today, you must sell business improvement, not products or services. That means differentiating yourself from your competition in the unique value you, your products and services, and your company can provide toward your customer achieving their corporate, divisional, business unit, department, or government agency goals. Have you transitioned into the mode of creating customer demand by targeting accounts--getting in before they know they have a need, and establishing yourself as a knowledgeable, trusted, and patient advisor? If not, you'll continue to be on the receiving end of all sorts of one-sided customer demands, mostly taking the form of answering requests for information, doing presentations, demonstrations, fighting the constant battle against having your offering commoditized by the customer, and being on the receiving end of strong demands for discounts. We've been taught over the years to bundle our products and services where possible to provide the customer with a single investment number. That way, we were told, they can't nickel and dime you, and can't slice up your offering, able to say no to pieces they don't want or need. But now times have changed and when you think about it, that's exactly what you want to do.

If you sell products or services that can be componentized, sold in pieces or modules, or in phases, you're potentially in good shape. Scenario You know your competition is going to come in with a substantial discount, as they have before. Your sales effort must include:

•Assuring yourself that the customer is not making a decision solely or primarily on price. This question must be asked again and again of key decision makers.

•Getting agreement from the real buyer that you understand their business objectives and that your offering can help them achieve those objectives. This method does not work unless you are dealing with the real buyer.

•Finding unique areas of additional value (on top of their existing requirements) that you can provide through the capabilities of your product or service offering.

•Management support for potentially selling part of your offering now, and the rest later on rather than selling the whole thing at a discounted price.

In cases where you know your competitors will be discounting, you'll need to offer several investment options to your customer. Alan Weiss, the consultant's consultant, suggests providing three opportunities for them to say yes.

If you offer your prospect three options to buy--let's say for the sake of labels, Platinum, Gold, and Silver--and you've done a good job of selling the business value of your offering--you can avoid having to concede more than a nominal discount. Your plan here should be not to discount, but rather to back value out of your proposal to meet the prospect's desired investment level. Presenting three options lets you do exactly that. The customer gets to determine how much they want to invest and will enjoy the resulting ROI associated with that level of investment.

Here are the three options:

The Platinum Option

•Gets the customer what they need (and want)

•Highest level of investment. You might ask for a 10-30% premium over the Gold level for this option, depending on the value you believe you can deliver to the customer.

•All the features, modules, components, capabilities available

•Your best resources

•Quickest time to value

•Priority service -- A special 800 number, top of the queue, 24 x 7 x 365

•The highest ROI

•Other perks, such as quarterly meetings with your CEO, special invitation events, input into your product development plans

The Gold Option

•Gets the customer all of what they need (and a few wants) How to Choose the Right Sales Training Products
You will have to choose from thousands of different sales training products when you choose the system or systems that you want to train your sales force with. Some of these products are very specific and some are general to sales. You will need to determine what your team needs and the best training methods for them before deciding on which products to use.Remember, sales training products can range from CDs, DVDs, tapes, online, books and many other sources. You will have to decide between all of these different formats for your team. Studies have found that the younger generations learn well online while some of the older generations have difficulty because they did not grow up in school learning on computers. Hence, you will need to determine which format is best for your sales force.First, you will need to determine the goals of your training materials. The more specific your goals are, the better you can determine which products will best serve your purpose. For examplempany can provide toward your customer achieving their corporate, divisional, business unit, department, or government agency goals. Have you transitioned into the mode of creating customer demand by targeting accounts--getting in before they know they have a need, and establishing yourself as a knowledgeable, trusted, and patient advisor? If not, you'll continue to be on the receiving end of all sorts of one-sided customer demands, mostly taking the form of answering requests for information, doing presentations, demonstrations, fighting the constant battle against having your offering commoditized by the customer, and being on the receiving end of strong demands for discounts. We've been taught over the years to bundle our products and services where possible to provide the customer with a single investment number. That way, we were told, they can't nickel and dime you, and can't slice up your offering, able to say no to pieces they don't want or need. But now times have changed and when you think about it, that's exactly what you want to do.

If you sell products or services that can be componentized, sold in pieces or modules, or in phases, you're potentially in good shape. Scenario You know your competition is going to come in with a substantial discount, as they have before. Your sales effort must include:

•Assuring yourself that the customer is not making a decision solely or primarily on price. This question must be asked again and again of key decision makers.

•Getting agreement from the real buyer that you understand their business objectives and that your offering can help them achieve those objectives. This method does not work unless you are dealing with the real buyer.

•Finding unique areas of additional value (on top of their existing requirements) that you can provide through the capabilities of your product or service offering.

•Management support for potentially selling part of your offering now, and the rest later on rather than selling the whole thing at a discounted price.

In cases where you know your competitors will be discounting, you'll need to offer several investment options to your customer. Alan Weiss, the consultant's consultant, suggests providing three opportunities for them to say yes.

If you offer your prospect three options to buy--let's say for the sake of labels, Platinum, Gold, and Silver--and you've done a good job of selling the business value of your offering--you can avoid having to concede more than a nominal discount. Your plan here should be not to discount, but rather to back value out of your proposal to meet the prospect's desired investment level. Presenting three options lets you do exactly that. The customer gets to determine how much they want to invest and will enjoy the resulting ROI associated with that level of investment.

Here are the three options:

The Platinum Option

•Gets the customer what they need (and want)

•Highest level of investment. You might ask for a 10-30% premium over the Gold level for this option, depending on the value you believe you can deliver to the customer.

•All the features, modules, components, capabilities available

•Your best resources

•Quickest time to value

•Priority service -- A special 800 number, top of the queue, 24 x 7 x 365

•The highest ROI

•Other perks, such as quarterly meetings with your CEO, special invitation events, input into your product development plans

The Gold Option

•Gets the customer all of what they need (and a few wants) 7 Tips to Attract Advertisers
- The More Affordable you are the better. It doesn't matter if you are a PR2 or a PR6, with 100 visitors or a 100,000 visitors. If you have options for every buyers wallet, then you will attract more advertisers. Do not limit yourself to only those with the big bucks...or the tight budget. Be versatile in your advertising options!- When you want to Increase, do it gradually. Don't just spike your prices over night. Make it a gradual progression as your site gains popularity. And make sure you keep several affordable advertising options, as mentioned above.- Have Specials. Don't you just love sales? Freebies? Well, so do those looking to purchase advertising. Try having monthly specials. You could give away a free home page button with purchase. Or do a buy one get one free advertising option(s). Have a few and change them monthly, weekly, or whatever works for you.- Promote your Specials. Don't just put them up and hope they are found. Announce them in your newsletter, blog, Scenario You know your competition is going to come in with a substantial discount, as they have before. Your sales effort must include:

•Assuring yourself that the customer is not making a decision solely or primarily on price. This question must be asked again and again of key decision makers.

•Getting agreement from the real buyer that you understand their business objectives and that your offering can help them achieve those objectives. This method does not work unless you are dealing with the real buyer.

•Finding unique areas of additional value (on top of their existing requirements) that you can provide through the capabilities of your product or service offering.

•Management support for potentially selling part of your offering now, and the rest later on rather than selling the whole thing at a discounted price.

In cases where you know your competitors will be discounting, you'll need to offer several investment options to your customer. Alan Weiss, the consultant's consultant, suggests providing three opportunities for them to say yes.

If you offer your prospect three options to buy--let's say for the sake of labels, Platinum, Gold, and Silver--and you've done a good job of selling the business value of your offering--you can avoid having to concede more than a nominal discount. Your plan here should be not to discount, but rather to back value out of your proposal to meet the prospect's desired investment level. Presenting three options lets you do exactly that. The customer gets to determine how much they want to invest and will enjoy the resulting ROI associated with that level of investment.

Here are the three options:

The Platinum Option

•Gets the customer what they need (and want)

•Highest level of investment. You might ask for a 10-30% premium over the Gold level for this option, depending on the value you believe you can deliver to the customer.

•All the features, modules, components, capabilities available

•Your best resources

•Quickest time to value

•Priority service -- A special 800 number, top of the queue, 24 x 7 x 365

•The highest ROI

•Other perks, such as quarterly meetings with your CEO, special invitation events, input into your product development plans

The Gold Option

•Gets the customer all of what they need (and a few wants) Interview Questions - Things to Think About Before the Interview
Whether you are preparing to interview, preparing to be interviewed, or just interested in conducting a quick self-analysis, the following topics tips will help you develop a perspective.PREPARATIONIf you are preparing to conduct an interview, begin with a clear definition of the roles and responsibilities for the position. Create a list of requirements, objectives and priorities associated with the position and use this as a guide to create specific questions for the TOPICS below.If you are preparing to be interviewed, research the job description and the company profile thoroughly. This information can frequently be found on the company web site. Develop a list of potential responses and also create your own questions to ask about the position role and responsibilities as associated with the TOPICS listed below.Even if you are not prepared to conduct an interview, or to be interviewed, you can review your current career roles and responsibilities to reflect onilver--and you've done a good job of selling the business value of your offering--you can avoid having to concede more than a nominal discount. Your plan here should be not to discount, but rather to back value out of your proposal to meet the prospect's desired investment level. Presenting three options lets you do exactly that. The customer gets to determine how much they want to invest and will enjoy the resulting ROI associated with that level of investment.

Here are the three options:

The Platinum Option

•Gets the customer what they need (and want)

•Highest level of investment. You might ask for a 10-30% premium over the Gold level for this option, depending on the value you believe you can deliver to the customer.

•All the features, modules, components, capabilities available

•Your best resources

•Quickest time to value

•Priority service -- A special 800 number, top of the queue, 24 x 7 x 365

•The highest ROI

•Other perks, such as quarterly meetings with your CEO, special invitation events, input into your product development plans

The Gold Option

•Gets the customer all of what they need (and a few wants)

•Budgeted level of investment. This is aimed right at the prospect's budget level.

•Most/many of the features, modules, components, capabilities

•Proven, talented and dependable resources

•Quick time to value

•An attractive ROI

•Other perks, such as quarterly meetings with your VP of Service, special invitation events

When your prospect tells you your competition has come in with a very low price, you discuss calmly with them the fact that you have an option (the Silver option) that will provide them with what they need at a competitive price. You will already have differentiated yourself from the competition in a number of areas: understanding the customer's business, industry, opportunities, challenges, competitive and customer pressures, and built rapport with the real buyer. In addition, you've professionally educated your prospect on the risks that befall companies who depend on tactical discounting to win. (See my July 2003 article, "How to Outsell a Competitor Who Slashes Their Price to Win.")

The Silver Option

•Gets the customer most of what they need now, and the rest in "phase two," next quarter or next year

•The lowest level of investment, aimed 10-30% below the Gold level, depending on how severe a discount the competition is going to offer

•Some of your total array of features, modules, components, capabilities. The rest can be purchased later.

•Talented and dependable resources

•Reasonable time to value

•An ROI that meets their corporate requirements

What will the customer do? The may tell you they want your Platinum option at the Silver price. If you've done an effective job selling the business value of your product or service and built a relationship with the real buyer based upon trust, you can look them in they eye and tell them it just isn't possible. What will they do then? My clients tell me that more often than not, they'll go for the Gold or Platinum option.

©2004 The Stein Advantage, Inc. All Rights Reserved.

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