Tuesday, December 17, 2019

The TCO / TCU Mystery

If you don’t fully understand how your corporate clients evaluate what you have to offer, it is virtually impossible to position your value effectively.

In recent years I have found in my sales negotiation seminars that my participants don’t have a clear understanding of how their clients apply the Total Cost of Ownership or Total Cost of Use models when evaluating products, services or solutions.

Not only do they often not know what criteria are included in their clients’ TCO or TCU model, they also don’t know how the individual criteria are weighted.

Interestingly, the risk and opportunity cost elements are probably the most overlooked and least understood items in this evaluation process. 

I have found that if sales specialists gain a better understanding of these assessment techniques, they can engage in a much deeper, much more meaningful dialogue with their corporate buyers.

This approach has helped many of my sales-coaching clients to close better deals faster.

The following article may provide some interesting insights:

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Thursday, December 12, 2019

Hypnotic Price Pressure

Price pressure is a powerful frame experienced buyers apply in order to direct their vendors‘ focus and attention. This works so well that many sales executives go into a state of trance where they desperately try to save the deal by doing whatever it takes to meet their clients’ expectations.

They refuse to lose. 

They review the scope, recalculate their cost estimates, renegotiate discounts internally… and try to reduce the price, in order to conclude the sale. This price hypnosis works so well, that many sales people I encounter in my coaching engagements really believe that price is all that really matters.

But buyers don’t buy a price.

Buyers are required to buy a solution that fits their internal clients’ needs. 

Cost-benefit optimization is usually one of the main KPIs buyers work towards. Price reduction simply happens to be the easiest and most obvious way for them to achieve their objectives.

The price is simply a means to an end.

And experienced buyers know that cheaper solutions often end up being the most expensive. 

So if you find yourself getting under price-pressure from your clients, identify the tactic and break the trance. Shift the discussion away from the superficial price negotiation and focus on what it is that they really need.

Learn more at: