Are Your Salespeople Blaming Price? Still?…

Did you know that in 74% of the loss analyses we’ve conducted, the salesperson has blamed PRICE or a lower cost competitor as the reason they lost?  Yet, when we interview their customers, “price”, or a lower cost competitor was the reason given only 22% of the time!

Price is easy to blame, and sometimes it really is the culprit. But far more frequently it isn’t. While working with the sales team of a large manufacturing company, we discovered that salespeople were constantly complaining to management about losing deals because their price was not competitive in the market. Management thought the current pricing model was correct, but to be sure, they needed a deeper analysis of why they were losing sales with real feedback from lost prospects. So, Ignite Selling was hired to interview these past clients and former prospects.

The first things we explored were the decision criteria used to evaluate our customer against other companies being considered. Although the definitions used by the prospects to describe their decision criteria weren’t always the same, the most common criteria mentioned was integration with existing systems, supplier innovation, reliability of systems, service, and price. We then asked the prospects to rank their top two criteria. Surprisingly, price was only in the top two for 15% of those prospects surveyed. Instead, most prospects cared much more about integration and reliability. One customer was even quoted as saying, “If the product couldn’t integrate easily with our existing systems, it would only mean more work for our staff.”

The second area we explored in our client interviews was around the key influencers involved in making the decision. Our client had assumed, based on their sales team’s feedback, that in most cases the CIO had the final authority. Unfortunately, the prospects we spoke to said otherwise. Yes, the CIO played a role, but in the end, several other influencers had far more say in the decision than the salespeople believed.

After we had completed our analysis, we took this feedback to the salespeople and their manager. They were surprised. Even more, they were disappointed. They had industry reports proving that their product was the most reliable on the market. They had references that could speak to its ease of integration, yet they still lost. And equally important, they discovered that their competition was speaking with individuals that they weren’t.

Unfortunately, this is a common scenario. Many salespeople blaming price didn’t know the decision criteria, much less which criteria that was most important to the customer. Salespeople also assume, often incorrectly, that they are working with the person most likely to help them seal the deal.

If you’ve lost a major opportunity recently, why did you lose? If you hear salespeople blaming price, then we’d suggest you peel back the onion to see if there is more to that answer.

8 Questions to Ask About Your Lost Opportunities

Maybe this will help. Answer the following questions about recent lost opportunities:

• Other than “price”, what were the customer’s decision criteria they were using to compare you against the competition?
• Which of your solutions’ unique capabilities were NOT considered in this customer decision criteria? Why not?
• How did this customer rank the decision criteria from most essential to least essential?
• How did this customer perceive your company’s ability to meet these criteria compared to the competition?
• Based upon the top three key influencers involved in the decision, whose criteria mattered most?
• How did the decision criteria differ from the top three key influencers?
• What did you do to validate the decision criteria you were provided?
• Who is your competition speaking to (that you’re not)?

If you’re not able to truthfully answer most of these questions, it’s time to look in the mirror and ask yourself if you might be making some assumptions that led you to lose your last sale. Many salespeople often spend much of their time evaluating opportunities on their own. Our experience has shown that the best plans are developed with opinions and input from multiple people, including managers, colleagues, and maybe even internal champions. These alternative perspectives can help ensure that we’re not making assumptions and that an opportunity is evaluated from a variety of angles.

Salespeople blaming price is a natural, knee-jerk reaction to losing a deal. It takes a little more time to go deeper and explore the answers to these questions. But when done right, we can promise you that you will win more and lose less!

Steve Gielda is the co-author of Ignite Your Sales Strategy: A Field Guide to Accelerating Your Pipeline. You can purchase your copy here or wherever books are sold. Follow or connect with Steve here on LinkedIn.