Further to last weekend’s note, I have been asked for more tools that combat 'pricing differential' when you are the seller with the higher price
Just in case we are not clear on this
EG: The buyer feeds back: Your competitor is less than you
Consider the 'currency' of transaction 'transparency'
The goal is to make sure that the buyer is comparing like with like in terms of the ‘key’ parts of the deal. What I am getting at is that sometimes the key parts of a deal represent maybe 80% of what you are paying for but will never be more than 30% of the potential cost & the rest of the price is the wrapper of delivery & fulfillment
Now, for sure, it all depends on what you are offering but maybe just reading this through will trigger off some points of consideration
This concept gives you the opportunity to present the most ‘transparent’ case for your service
Think about deconstructing what you offer into its component parts & talk through exactly what they are paying for regarding each part
EG: So maybe it is a Legal offer
Over all you are costing more. However when you break it down this is because with the competitor the bulk of the work is being delivered by a trainee, not a fully qualified professional. So are we comparing the price of competing Oranges or are we comparing the price of an Orange versus a Satsuma? (That both appear to be in the same type of box)?
This is to get the vendor to start thinking about what they are actually paying for within the deal
Your proposal maybe more money but the key ‘value’ component within that deal takes up the majority of the budget. This is why you are more, but your offer is more valuable
The lower bidder may generate the lower price overall but it is achieved by spending less on the key ‘value’ component of the deal. Arguably that offer is less value
The lower bid is achieving a lower cost by surrounding the ‘valuable’ part of the transaction with lower value parts that actually effect the overall performance of the ‘valuable’ part. Putting a new engine into a rusting car body
This model works in slightly more sophisticated offers but consider it for anywhere the buyer attempts to turn your proposal into a commodity
How can you make your proposal more transparent to your advantage?
Discuss the USP of the ‘key part’ of your offer in the transaction
The value of the expertise in comparison to the market place
The impact of surrounding valuable expertise with low cost delivery & fulfillment
Refer to the highest value recognizable feature of your proposal
As examples it might be:
Qualifications of the deliverer
Sector accreditation's
Years of service
These are assets & don’t allow them to be camouflaged within the quote
Deconstruct your proposal pointing out the value of each component
(Looking forward to speaking about negotiation at the internationally renowned Kozminski University 8th April)
Business development trainer, coach & consultant
I deliver negotiation skills into the Professional Services sector
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