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Transactional Selling to Avoid Conflicts Around Price

The reason so many people want to be transactional and agree to a discount their price is that it eliminates one of the major areas of conflict in sales. If you agree to your prospective client’s price, then there is no conflict, you just say “yes” and you are off to the races.

While this approach eliminates a natural conflict that occurs in most major deals, it eliminates a lot more than that.

What You Are Losing

Being transactional eliminates any perception that you are a consultative salesperson or trusted advisor. A trusted advisor engages in the difficult conversation. They don’t fear it. Instead, they embrace it, knowing that they are demonstrating their value by tackling the difficult stuff many salespeople fear.

When you are transactional and competing on price, you eliminate the ability to differentiate your offering. You eliminate the perception of value. Price is an expression of value. The low price leaders in your space don’t compete on value. Lowest price is an absence of value. When you are transactional and reduce your price, you are projecting a lack of value and a lack of differentiation.

Being transactional, especially when it comes to pricing, eliminates the profit you need to execute the solution that you are selling your client. It eliminates the likelihood that you succeed for your client and, over time, it eliminates the possibility of retaining them as your client.

Know Pain, Know Gain

By engaging in the back and forth of a negotiation around price, you deal with the inherent conflict. You also gain the opportunity to turn a sometimes uncomfortable conversation into a collaboration around making the right investments, producing the right results, and choosing the right partner.

This conversation around price provides you with the opportunity to move from transactional to strategic partner—but only if you are willing to engage in what can sometimes feel like conflict.

Questions

Have you ever been tempted to reduce your price to avoid a conflict (or a difficult conversation)?

What do you risk losing by behaving transactionally, especially when it comes to price?

What do you gain by taking business at a markup that doesn’t serve your needs and puts your results at risk?

How do you turn a difficult conversation that is a natural conflict into a collaboration?


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Comments

comments

  • DHL

    I think price is a byproduct of value. It can be inflated slightly by the perception of higher value but ultimately reality will mitigate perception’s effect. ROI is the big determining factor on price and usually, like water, seeks it’s own level…what the market will bear. Someplace slightly lower than what the seller thinks and slightly higher than what he buyer thinks.

    • http://www.thesalesblog.com S. Anthony Iannarino

      We’ll have to agree to disagree, DHL. Return on investment is about as nebulous as value. Both are perceptions, hence both are subject to being improved.

  • http://www.mikepedersen.com/ Mike Pedersen

    Off-topic Anthony, but can you direct me to a resource to improve confidence in the prospecting arena? This is my pitfall at the moment. I have a high level of confidence in my deliverables, but not that initial contact.

    I just despise cold calling, as I have heard these businesses are getting hammered 20 times a day from sales calls, and I don’t want to be put in that group of people in the office managers eyes.

    I am very driven, but offline consulting and sales is new in my wheelhouse, as I’ve been an online marketer for 15 years.

    Any guidance or direction would be greatly appreciated sir.

    Sincerely,
    Mike

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