You didn't lose on price...

I was having a conversation the other day with one of our salespeople about a lost sale. Despite the fact that we lose twice as much as we win and despite the fact that failure is our best teacher, we just don’t have these types of conversations very often. That’s a separate story all together.

There we were, we had spent months pursuing the project, engaging the internal team of estimators, operations, risk, technologies, etc. We thought we had the customer on board with all the reasons they should pick us, and we lost. When we debriefed as a team, the general consensus was we lost because our price was higher than our competitor. In fact, our customer told us that we lost because our price was higher.

But there was something about that conversation and every one that we’ve had like it that didn’t sit well with me. I went back and looked at the last 10 projects we lost and reviewed why we lost. No surprise, 10 out of 10 were because of price.

However when I looked at the projects we won, it was never because of price. We actually won despite not having the best price. So therein lies the problem. How is it that we always lose on price, but never win on price? There’s a sinister little lie that we love to tell ourselves. It’s the same lie that our customers like to tell us to get us off the phone. Also see (It's not the salesperson that is lying...). The lie is that price is the primary factor in deciding who wins or loses a deal. I’m going to make a bold statement and I hope I get pummeled for it.

PRICE is not the reason you are losing sales.

It’s easy for the customer to hide behind price because what they actually want to say, but won’t say, is that you weren’t able to show them more value than your competitor. This is a failure of the overall organization because either the value doesn’t exist or you don’t know how to communicate what it is. It has nothing to do with price.

The value doesn’t exist because your competition figured out a way to provide the same or better quality at a lower price. In today’s market where information is literally at our fingertips, I don’t believe businesses can consistently provide low quality or poor service and stay relevant. Or if you really do have a more valuable service, you weren’t able to make it clear during the sale. Either way, that is on us.

Now, there may be some of you that are saying, “it’s semantics. Price and value are the same thing if a customer is buying on an apples to apples comparison.” Another fictional story is that apples to apples comparisons are possible. They’re not. In every comparison of two or more vendors there are differences in value. They could be service, added benefits, certainty, experience, etc. But make no mistake, there are always differences.

Getting better starts with getting honest. Honesty with ourselves and honesty with others including our team and our customer. How about this approach the next time we lose a sale? Ask the customer what value our competitor brought that we weren’t able to bring. Tell the customer, we’re looking to get better and want to understand the real reason we lost the sale. Don’t let them off the hook if they say price.

How about we strike the “lost on price” excuse from our lessons learned meetings and start with how we could do a better job bringing value to our customers. Or how we could do a better job communicating and providing certainty to our customers during the sales process? At the very least, if we are taking credit for closing deals when are price is higher, shouldn’t we also be willing to be self-aware when we lose? 

Thanks for reading, you can reach me at [email protected]. Read and comment on my other articles such as Stop cutting your grass! Please comment below. Why did you lose your last sale? Was it price?