December 2012 Tip: A Costly Proposition
December 2012 Tip: A Costly Proposition
When it comes to selling our value, especially to Procurement, it seems like we have two different battles to fight.
The first battle is "value vs. cost". As value leaders, we have to use all of the tools available to us to position our value: customer knowledge and the impact we can make on their business; references; industry experience; financial return models and projections... This is more challenging than ever, and more important. Many companies are increasingly focused on driving costs down, sometimes at the expense of higher returns. Of course, if we are going to try to win the business by focusing on value vs. cost, we have to make sure we are selling the value to decision makers who can buy it. In many cases, Procurement simply isn't interested in our value.
The second battle is "unit cost vs. total cost". Procurement often wants to base their decisions on unit cost. Unfortunately, unit cost measurement changes the playing field and doesn't tell the whole story. This basis of measurement slants the playing field against value leaders, who can often make an impact in other areas that may not show up in a pure unit cost analysis. Complicating this situation is the reality that, in many cases, this is how procurement is measured and compensated - unit cost rather than overall cost. Again, it may be imperative that we elevate our access to decision makers who have a different view of value and return.
What becomes clear is this - in order for a value leaders to affect a decision, they may have to affect the decision criteria and the decision team.
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