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Is “Value-Selling” Relevant in a Distressed Economy?
“Yes, we’re getting a lot of calls for quotes, but right now everyone is going for the lowest price”. This is a sentence out of a conversation that I was having on the phone yesterday with a client. I had called just to stay connected and to enquire after his and his family’s wellbeing. Naturally though, the conversation turned to business and how this Covid19 is affecting the economy.
He continued, “so to get any business, we have to cut our margins to the bone. Everyone is struggling to stay afloat, so right now price-based competition is what characterises our market.”
I know how he feels so I commiserated with him for a while and shared some of the challenges that we have in our industry. We discovered that our two industries, although dealing in different commodities, are not all that different. The main similarity is that we both find ourselves in a cut-throat, price-based market! I have known this client for a long time and know that he is a very opportunity minded person, so I took a chance and asked him what opportunities exist for his business in a price-based market.
“I’m not sure Mark. Right now, we’re too busy chasing cheap quotes to even think about tomorrow never mind think about opportunities!”
I could hear the worry and desperation in his voice. His business is a well-known corporate with an impeccable reputation. “Do you remember when we read Failing Forward by John Maxwell?” I asked. “Yes” he said doubtfully, not too sure where I was going with this. “Well an important lesson in that book, and one that many people miss, is where he says that when you fall, don’t be in too much of a hurry to get back up. Stick around down there for a little while to see what other lessons you can learn. Don’t you think that this economy is reflective of what John Maxwell is saying here?”
There was a short silence then, "It’s a fair point Mark, but I can’t really see it fitting our current circumstances.” “Ok. Let’s look at what we know. We know that this severely price-based market is temporary, that some companies will get their fingers burnt by going purely on price, and that they will eventually start balancing the price they pay with the value that the supplier adds to their business. Right?” He agreed with that statement. “So don’t you think that while your company is providing the price-based service that you quoted on, it should be: a) doing the job better than what anyone else could (really impress the client), and b) be looking around while it’s there for further opportunities to add value to the clients business?”
“OK. Point a) we’re already drumming into our staff, but we haven’t really looked at point b).” he said somewhat uncomfortably. I pushed my point. “Just because the economy is functioning in crisis mode doesn’t mean we have to stop prospecting for business. When you’ve closed on a price-based deal, that becomes an opportunity to dig into the new client for more business opportunities. They may not happen now, but when we recover from this crisis, your company will have a well-planned value-based strategy ready to get more of that new client’s business.” There was a short silence; then he sighed and said, “why aren’t my salespeople and ops staff thinking this way?” I answered, “We have a unique opportunity whenever we find ourselves being asked to quote on price and urgency. Make the most of it!”. And with that we said our goodbye’s.
I returned to my desk thinking about this conversation and the realisation that Value-Based selling is distinctly relevant in a distressed economy. Yes, the business relationship will start as one based on price, but the value opportunities abound. They are just hidden behind the immediate needs of urgent delivery and low price.
Don’t be overwhelmed by the pressure to get the business. Yes go get it, but at the same time, be alert to those value opportunities. You are going to need them.
This article is protected by copyright and may not be duplicated or republished in full or in part, without the express written permission of Mark Deavall. Mark is contactable on firstname.lastname@example.org or +27 82 465 5481.