Every company must have a model they believe allows them to win clients. Once they decide how they are going to market (GTM), this will require selling according to the limits of your company’s model. There are two primary models that sales organizations pursue to acquire the clients they intend to.
The first model is transactional, which is designed to make it easy for the client to buy. Often, the salesperson will find their client is educated about what they are buying, making the decision-making process easier than with a different approach.
The second model is consultative, providing your contacts with information, insight, counsel, advice, and recommendations. When executing a complex sale, two things are true. Whenever a client makes a rare decision with the possibility of failing, there is a need for a consultative model.
One of the challenges of shifting models is that a salesperson who has long experience selling in a transactional model will need time and B2B sales training to become a consultative sales professional. Before we move on, it is important to know that both of these models are effective. One is not better than the other. Each is effective when applied to the right client, but neither is effective when applied to the wrong client.
Whether you use a transactional or a consultative model, your company strategy includes a pricing model and a delivery model. Here, we will explore how these models work in B2B sales.
Navigating B2B Sales: Understanding Your Pricing Model Strategy
You will have to forgive me here, as I am a purist. Your company has a pricing model. On one side, there is the low-price model, which often comes with a set of concessions that the client is unaware of until after they have bought from the salesperson.
If you have ever lost a deal to a low-price competitor, only to have the contact call you to come back with a contract, you can be certain that the low-price competitor was unable to produce the necessary results. As much as you and I wish this happened more often, the truth is that some low-price providers succeed in taking care of their clients.
In every industry, there tend to be a couple of pricing models between the low-price provider and the highest-price model. You might find that there are companies in your industry that are scaled-up, low-price providers that are able to offer more than the lowest-price competitors. This scaled low-price model wins large clients with a high need or a footprint that allows them to execute for their clients, even if they may have a slightly higher price.
If you are reading this, you may find yourself between the scaled-up, low-price competitor on your left and the highest-price model on your right. This third pricing model is called good enough. In this case, you are likely to have to compete on two fronts. The best sales training in B2B provides you with effective strategies for winning deals and how to compete against your competition.
The last pricing model is a high-price model that delivers greater value than the three pricing models we have discussed to this point. These companies have only one concession, and that is spending more to acquire what they sell.
Sales leaders must enforce the pricing model, as the investment is what allows the company to execute their delivery model. When a salesperson believes that they lose deals because of their price, the root cause is often that they never learned how to compete against the different pricing models.
Mastering Delivery in B2B Sales: How Your Company's Model Affects Client Success
This third model is your company’s delivery model. To ensure your client is able to realize the better results that cause them to initiate a change, your company’s delivery model is crucial. Different sales organizations will go about delivering in different ways. Some sell and provide little or no help, similar to a transactional model. Amazon is an example of a transactional model. They make it easy for you to purchase whatever you need, without any help after you check out. However, there are delivery models that provide a great deal of help executing the change the client needs to make. Neither delivery model is better than the other, as each is right for the right client.
If you use a sales model that is at odds with what your client needs in the sales conversation, downstream you may have problems, especially in complex or enterprise-level sales pursuits. You may also lose a deal by trying to create value for a transactional client if your contact believes you are wasting their time. A contact that is transactional may also reject your attempt to upsell them or try to change their mind, even though you may have to give it a go.
Every so often, someone decides to break their pricing model, lowering their price to win deals. The challenge for companies that try to lower their price will almost always be that they are not able to lower the price enough to compete with the low-price model. But worse, by reducing your pricing, it can impact the profit your company needs to be able to deliver the results the client needs.
Leaving this article, you should look at your sales model and how you might improve it. You might also want to look at the different models with which you compete and beat them for the right clients. If you worry about pricing, it may be the result of not having a sales strategy. You may not have ever been shown or had someone explain the three models you find here, but education will help you sell more effectively.
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