Know-How Exchange : Strategy

Yours is a very common issue in the technology market. To battle what I call "the low price works just fine mentallity", you must put together an iron clad case for the value of greater productivity. This has to include first a number of case studies on (exactly) where the productivity come from. The value of the lost time worked out in a conservative manner.

Then you need to create a work sheet which allows the prospect to develop their own numbers. Offer help along the way with interactive tools or a pre-developed spread sheet that can be downloaded into exel.

Ultimately, if your product does what you say it will do users can be driven to pay attention.

If you want to chat further about this concept - contact me via my profile.

Actually consumers are into into the pros and cons of alternative home water heater technology-- based on LCA (life cycle analysis). I had a long and very interesting conversation with the national sales manager of a manufacturer in this field and its one I took for granted.

So I'm having a hard time following your question. NuCoPro calls it TCO, in other fields LCA is the buzzword.

People make decisions to improve their productivity all the time. That is why we pay a monthly fee for something more than dial up internet connection.

So I assume you aren't in the hot water heater business!

If you are getting shot down because of initial price-- remember that is a stall not a real objection. A good spin is to acknowledge the objection "a lot of people tell me that our price is too high, but when they see... " And focus on again, the TCO or LCA.

And if you give us more specific info, we can give more specific advice

Dear Peter

No, you are not wasting your time and if there is a real advantage from using your product if only you can communicate it to the prospective customers.

Carol. Gary and Frank have expressed some ideas with which I can concur, but the basis of your problem will not be served by trite marketing ploys, much though I am guilty of originating many of them in the B2B sector.

I should take my experience from combustion analysers (A product without a market) through to bursting disks (Pressure relief devices) both of which costed more than the apparent competition and did the same job – but with just a bit more to make it worthwhile.

What we did was to take our message out to the consumer and close the sale in an interview or presentation. It mattered not that the competition were already established upon the site and it mattered not that the competition was selling at half the price.

What did mater was that our sale people had an opportunity to demonstrate, expound and then close a sale. That is the area I think you need.

If you wish to view it as I do, it was not a result of clever marketing but a simple application of proper sales techniques.

What we did was to provide the leads so that the sales people could go in and start the process which would lead to an order.

OK It involved re-writing and re-motivating the sales people, but in both instances I can assure you that there was a massive level of success associated with these activities.

In summary, I think that you should concentrate on your sales effort and support it with lead generation which allows the sales people to both open and then close sales.

It’s a bit of a tall order and probably not what you were wanting to hear, but from experience, Its is a grind, but it does work. .

Best wishes


Steve Alker
Xspirt

TCO - Total cost of ownership - has to be the way to go to convince the customer, but as Stevea points out, before you start trying to re-educate the B2B customer, you're first going to have to reducate and convince your B2B sales force.

One of the best ways to do this is to get the sales force to do some research for you. Get them to establish the customer's buying habits now, and the price they are paying for whatever device it is.

Then get them to analyse the device in use, including not just all labor costs associated with its use, but also the maintenance costs, costs of downtime, energy and water usage, if applicable, exothermic properties that might be indirectly consuming other resources to keep the area cooled, etc.

Then prepare an ideal world solution using your product, with all the associated costs as a contrast.

Now if your product is more expensive to buy but cheaper to run, there comes a point (given some assumptions) where the cost-timeline for the two products crosses over. After that time, whenever it is, your product is continually saving the customer money, while the other product is continuously costing the customer more and more money.

Once the sales team understand this concept, they will be able to educate the prospective customer.

The big problem with this discussion is that we still have absolutely no idea what kind of product we are talking about and what it does.

What kind of TCO are we talking here? hundreds, thousands, millions??

Personally, I believe that this is not a marketing issue but a sales issue.

I can already see from your question that you are 'Hung Up' on the price of your product :-)

If you yourself don't believe that your product is a good value, then how will you ever convince your buyers.

Firstly, assuming that we are talking in the many thousands of $ for this product, it is important not to be spending time in your sales meetings focusing on the price or TCO.

make sure that you are selling the benefits.

A good way also to make this work for you is to change your business model.

Companies are always worried about Costs and cash flow. Capex is a tough one to swallow.

Move your product cost out of Capex and put it into Opex.

In other words, stop trying sell it to them (ownership) and just lease it to them as a service for which they pay a monthly fee. (lease or rent).

As soon as you start talking about Capex, then this has to be approved by very senior people and has to be added in NEXT YEARS budget. (probably even approved by the board).

If it is Opex, then the managers in charge can approve it within their own budgets.

Talk about all the wonderful features, BUT SELL the excellent BENEFITS and COST SAVINGS and then make the payment very very easy on a monthly basis.

Show your client a direct comparison between monthly cost and monthly cost savings benefits.

It is all about CASH FLOW.

In fact, we are a technology company and we have managed to negotiate several deals with major software vendors wherein they initially asked us to PAY for the software but we agreed to have it onmly if we could pay it monthly.

Of course they agreed :-)) (even if they said don't tell anyone else that we allowed it :-)) ) .

In the end, everyone is happy.

We get the software we need and they get a steady monthly income.

I would be more than happy to work with you a little on re thinking and re working your sales pitch if you would like.

Feel free to get in touch.

Good luck,

Matthew