Jennifer Kinson sells professional services to Fortune 100 customers in information technology. She typically manages 6- to 7-figure deals. Because of the size of the engagements, Jennifer has to put together ROI statements for her customers. She does not have a traditional sales background, and that works to her advantage. Her husband, James Kinson, is the host of The Cash Car Convert.
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Talking About Price Is NOT Slimey
- What is the most important thing you can share about pricing?
- Talking about pricing does not have to be uncomfortable.
- It is about establishing the value of your product or service.
- If you are not having that value conversation, you are not very credible.
- Talking pricing is not unethical or slimy.
- During her first 10 years of selling, she went through the entire sales process, disclosed the price at the end and then took the objections. It was not a comfortable situation.
- Customers are looking at products and services because they already see value in them; these are not cold calls.
- Sales is about customer service and solving problems.
- The pricing discussion is about understanding how much value they see and what it is going to mean to them.
- Why is a professional more valuable to an existing customer?
- You are more valuable to your customer the longer you have been in a relationship with them.
- A transactional customer relationship, where you engage and disengage, loses momentum.
- Having a partnership with your customer gives you confidence that there is value in the relationship. The conversation is not about price.
- Fortune 100 customers have purchasing departments that do not care about the value.
- They are a disconnected organization, which takes each engagement down to the lowest common denominator.
- When you can deliver value that no one else can because of your long-term relationship, your price can be higher.
The Mindset of Corporate Purchasing
- How can you counter the typical mindset of corporate purchasing?
- There is an organizational discord between the customer-facing people and the people in the back.
- As a seller, by design, she is not going to be working from the same agenda as procurement, whose mission in life is to take cost out of a contract.
- She does not like to provide a high price, knowing they will knock it down, as she negotiates in good faith with her business stakeholder.
- She tells procurement that she has already worked with the stakeholders and has provided a good price for the value they need.
- If they think that the business stakeholder missed something or a remix is needed, she will work with them.
- You increase the cost to the stakeholders if you hire someone who does not do as good of a job.
- If you have not internalized your value, then you are vulnerable to those kinds of arguments.
- If you have done a good job, your stakeholder is prepared to be your advocate with procurement.
- The stakeholder has to do his due diligence before procurement ever sees the proposal.
- Procurement's tactic is to say to competitors, “This is the business outcome I need – can you do it for less?”
- You are exposed to these tactics if you have not worked with your stakeholder throughout the process to make them understand why you are uniquely qualified for that project.
- You must be able to explain that you are not only providing the value required but that you are eliminating risk.
- Some procurement people come with a win-win approach; others approach it as a boxing match.
- Procurement is a reflection of the company culture.
- Financial consulting and professional service firms have a better grasp of assigning value to risk than manufacturing companies.
- You have to prioritize the procurement battles you are going to fight, due to high demand and limited resources.
- Careers and livelihoods are at stake – there is a right way to do it and a cheap way to do it.
- Your poker skills are not what you want to bring to the negotiation table.
- Can you sell on value to corporate procurement?
- You can, as a qualified yes.
- It depends on the corporate culture.
- If you are just talking to procurement, your odds of having a value conversation is lower.
- If you are at a strategic level and you are actively working with the stakeholder and they bring procurement in as a partner, you are more likely to have a value conversation.
- You have to be judicious about involving procurement earlier in the conversation.
- Keeping your business stakeholder in the conversation is more beneficial than bringing procurement in early.
- In one situation, by working with procurement early, she was able to a structure to fit their business and win the proposal.
- They helped her re-architect and reframe the deal to something that worked for her team and theirs.
- Positioning yourself as a partner is the best way to work with procurement, but it is very nuanced to each company.
- It is relationship-driven. Navigating the corporate politics of each organization requires a champion or sponsor to help you with procurement.
- The sponsors are usually executives, but not always. They are always key influencers.
- You have to put effort into the relationship to earn the sponsor's trust before you engage procurement.
Creating ROI Statements
- How do you create an ROI statement for a customer?
- If you are selling to a business, whether you are stating the ROI or not, the case is being made.
- Your stakeholder is going to have to justify why he wants that product or service.
- The need has a value associated with it, and your product or service has a price associated with it.
- By doing the math and including the long-term value, you can set up a slam dunk.
- Work with the stakeholder to determine the value and include it in each piece of documentation you send.
- It takes an investment of time to get the data together; otherwise, you are taking it on faith that the stakeholder will handle it.
- You have to help them understand what the value is to go beyond the cost mentality of “the budget.”
- Understand the way your customer perceives the offer you bring to the table, especially if you are creating new value.
- Salespeople have to be experts at discovering and explaining value.
- To operate as a partner, you have to be able to align to the risks and the business initiative.
- If a customer is trying to solve a strategic problem with a tactical discussion, you can hand it off to someone else.
- What is one of your best stories about creating value for a customer?
- In working with a customer who is re-engineering how they interface with their customers, every percent she increases their efficiency saves them $50 million.
- The value associated has a direct correlation to the number of jobs they can maintain and value they can bring to their shareholders.
About Jennifer
- LinkedIn: linkedin.com/in/jenniferkinson
- Twitter: @jenniferkinson
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