“Mission and purpose is what’s going to guide your decision making.” – Jim Camp in today’s Tip 1639
Do you allow yourself to fall into the trap of thinking that you’re a commodity?
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Scott Ingram: You’re listening to the Daily Sales Tips podcast and I’m your host, Scott Ingram. Today’s tip comes from Jim Camp. Jim is a former VP of Sales, and is now an owner and coach with Camp Negotiations. Jim has also served as a military pilot and is retiring as a Major General from the United States Air Force. Here he is:
Jim Camp: Hi, Jim Camp, again. Hope everybody’s doing well. I want to expand on our previous sales tip as we were talking about mission and purpose. Something else occurred to me, and I think it’s important to bring up.
Recently, our team was given a workshop to, we’ll call it a small private equity group that oversaw about a dozen companies. And what was interesting is that one of the senior leaders of the private equity group there stressed to his team the importance of understanding the value that each company in their portfolio brought to their respective clients. Most companies in the workshop actually were focused in manufacturing. I think especially in manufacturing, there’s a tendency to feel like what you produce is very similar to your competition.
The purchasing teams that these manufacturing companies were going against were all procurement professionals, and they were operating using tactics, trying to make them feel like they were actually a commodity, and that price was actually the most important part of the deal. This brings up an interesting point when you’re competing in sales for business. Be aware that your opponent may actually try to make you see yourself as a commodity. Commodity, by definition, is something that is pure and unchanged. Commodities like corn, natural gas, raw materials, etc, they’re all basically the same.
Here’s a tip for today.
Do not allow yourself to fall into the trap of thinking that you’re a commodity because you’re not. If you do fall into this trap, you may actually find yourself leaving margin on the table, giving up on price.
For example, if a company asked you respond to an RFP, a request for proposal, and they want you to propose your pricing structure in order to deliver your product, make sure you have a clear picture of the challenges they’re really trying to solve with your product.
Here’s the problem.
Unless you know exactly who you’re competing against, and unless you’re aware of the differences between your product and your competitors, make sure you stay focused on your mission and purpose and be very clear about the value that you bring to the table.
I’ll give you a recent example of something our company went through. We’re competing with two other negotiation training and coaching providers, and the problem was we were the highest priced out of the three by far. In reality, the company that was seeking our training was trying to solve a long-term problem and needed big help with their global sales team.
Given the scope of their challenges and comparing our services to the two competing bids would be like comparing putting a bandaid on a cut to undergoing a major medical procedure. The fact is we were not willing to be the Band-Aid because that went against our mission and purpose. We were far more expensive, but what we delivered had a heck of a lot more value, we felt, than our competitors. Our buyer was focused on price, and quite honestly, they did not have the budget. So we did not have a deal.
So when this happens, when you’re compared to others based on price, you’ve got to fall back to your mission and purpose and re-engage the decision makers with why you’re even in the bid in the first place. In a nurturing and respectful way, ask them what they see as the difference between you and your competition.
Here’s a few questions that you can use just as an example.
Aside from price, what else is important regarding your decision? What prompted you to reach out to us as a potential supplier for this product? How important is quality and timely delivery?
Hope you get the point here.
Once you discover that there’s friction on price, don’t let them make you a commodity, circle back to their vision while you’re there in the first place, and this is why your mission and purpose is so important. Understand the value and the benefits that you provide to your client that others cannot. At the end of the day, people will always be willing to pay a higher price if you can help them see and discover what separates you from your competition.
I hope this episode pushes you to think hard about what separates you from your competition, and I hope you’ll stick by your mission and purpose. Mission and purpose is what’s going to guide your decision making. Remember, one more time, you’re not a commodity. I’ll see you next time.
Scott Ingram: To connect with Jim and to get your hands on their free download with the 4 Reasons People Say No, just click over to DailySales.Tips/1639. Once you’ve clicked over there to grab that download, be sure to click back here for another great sales tip. Thanks for listening!