7 Reasons C-Level Relationship Selling Eliminates the Need for Low Price Bidding

1. I learned long ago the only way to use low pricing as a strategy is if you are the low cost producer.  In this way you can outlast your competitors by losing less.  Once they are out of business, you’ll own the market and can charge what you’d like.

2. The other thing I learned quickly from Hard Knocks University is that senior level executives (the people that make the final-final decision) do not care about the lowest price.  They do care about affordability however.  Don’t get the two confused.

3. C-Levels and P&L leaders value business results more than they focus on price.  Whoever is seen by the leader as a resource - helping him /her do business better, will get the contracts.  What’s tricky here is that you need to know what specific business results the leaders value.  Thinking they all want the same things will send you down the wrong path more often than not. 

Each leader has his or her specific, subtle or profound agenda.  In order to eliminate price as a deciding criteria and to value price, you’ll need to know that agenda exactly.  Just as importantly, the leader will have to know you know his / her agenda.

4. Don’t be confused that a formal request for proposal to all competitors will mean the buyers are comparing apples to apples.  Some aspects of the apples are more revered and valued by some high level people than other aspects which are touted by low level people.  How many times have you said - after losing a bid, “If I had only known they were really emphasizing that part of the spec?” or something to that effect.

5. If the subordinates have blocked all sales people from the getting to the final decision maker, all competitors will look alike to that leader.  The subordinates pick their choice and submit the recommendation (usually informally).  The ultimate decision-maker gets some assurances and gives approval.  S/he is thinking the job will get done and that’s that. 

But what if one competitor got to the ultimate decision-maker and knew what part of the apple was valued more.  What if that competitor had advised the ultimate decision-maker to compare that aspect among alternatives? That competitor would have an edge because s/he would have emphasized that aspect.  Then the choices would probably look differently.  The subordinate would have to justify accordingly or select the competitor who had learned the really decision criteria.

6. Once a C-level or P&L leader is committed to an expenditure or investment s/he will say to the subordinate, “Do it and get a good deal.” However, the subordinate interprets “good deal” usually as the low price among the reputable suppliers. The best way to get lowest price is bidding – commodity mentality.

Someone has to say, “Boss what’s a good deal look like to you?”  Subordinates usually don’t ask that question.  They fear they’ll be perceived as out of touch with the business issues.  So they tell everyone what they think the boss thinks is a good deal.  To avoid bad information the sales person has to ask the boss directly what a good deal looks like. 

7. Unless someone gives the boss a compelling reason to pay a higher price or change what they’re now doing, they will go low price or remain with the current situation.  Even if the operations people say, “This would be great,” the P/L person will say, “Unless the business is threatened, let’s get along with what we have.” “Unless someone gives me a compelling reason, there is no need to spend more.” This is why it’s so though to introduce new technology without framing it around the boss’s success factors.

And now I invite you to learn more.