Monday, November 12, 2012

Positioning II

you have accepted price complaint feedback from your sales force at face value rather than recognize it as normal negotiation posture. 

Many wholesaler-distributors are frustrated because customers seem to "want the value of our service but aren't willing to pay for it."  At first this may seem like a message gap because, "if customers just came to understand how great we really are they would be happy to pay our premium."  However, if you frame the issue in terms of the customer's business drivers you can see that there are several other possibilities:

  • There's really not much of a gap.  The customer really does value your service, at least in some situations, and has demonstrated his or willingness to pay for it by his or her actions.   However, you have accepted price complaint feedback from your sales force at face value rather than recognize it as normal negotiation posture.  Many buyers have been professionally trained to exert constant pricing pressure, and it is only natural to take any opportunity to push for a lower price if there is no real consequence for doing so.  In this situation, you have made the classic mistake of relying on your sales force as the sole channel for customer insight.  In contrast to their words, customer's actions indicated recognition of your value an imply that there may not be a (significant) market gap.
ACTION POINT:  Don't always accept price complaints at face value.

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