“Share an open book calculation on the innovation and how it can be beneficial to the buyer’s organization; a simple cost-benefit analysis will help greatly.” – Mark Schenkius in today’s Tip 888
Why buyers don’t like innovations?
Join the conversation below and go get a copy of his book!
Have feedback? Want to share a sales tip? Call or text the Sales Success Hotline: 512-777-1442 or Email: [email protected]
Scott Ingram: You’re listening to the Daily Sales Tips podcast and I’m your host, Scott Ingram. Today’s tip comes from Mark Schenkius. Mark is the founder of ROI 10 where he helps sales professionals get better at dealing with buyers. He’s also the author of “The Other Side of Sales,” where he shares his perspective after 15 years in procurement. Here he is:
Mark Schenkius: I was once at a conference organized by the company I was working for and I ended up having dinner with a group of suppliers. I was fairly new into my packaging buying role and I naively asked the question: “So, what can our company still improve on?”
I wasn’t expecting the tsunami of answers I got that evening. Everyone said the same: “We have so many ideas to share, but you are not willing to implement any one of them.” They even said that it wasn’t very different with other companies.
This made me think. How come buyers are so reluctant? Why are they not keen on innovations? It started to make sense to me and today, I’ll share some of these key insights with you…
If you assume that the cost of an industry-standard product or service is 100, then a unique product or service would cost, for example, 120 for the simple reason that it needs all kinds of adjustments which cost additional money.
At the same time, the more unique a product or service is, the less suppliers there are on the market who can actually provide this. As a result, the price might even go up to 130, because the buyer has nowhere else to go.
Now, this is how buyers perceive innovations: as a financial risk. And this is truly a buyer’s nightmare because the less suppliers there are, the less buyers can leverage the market. And the more unique a product or service is, the more dependent buyers become on this one supplier.
All of this means that buyers lose negotiation power in the relationship which in turn means that they are not sure they are actually getting the best deal possible. And they sure don’t like that.
So that leaves a question: what can you do about it?
Here are some thoughts:
The first option, I’d like to call out is ‘bypass the buyer’. I know buyers are often gatekeepers into an organization, however, try to find potential users of your innovation and get them excited about your product or service. This way, they will influence the buyer rather than you. Convincing an engineer to buy a very special piece of equipment is easier than convincing a buyer to do so.
Secondly, you have probably been instructed by your sales organization to sell your latest innovation on the market. Use that knowledge to tell the buyer that they only have limited time to use or implement this innovation and that you are going to have to offer it to other customers very soon. Buyers don’t like missing out on a good deal.
Thirdly, share an open book calculation on the innovation and how it can be beneficial to the buyer’s organization; a simple cost-benefit analysis will help greatly. And by being transparent, buyers don’t have to worry whether it was a good deal or not.
That’s it. Happy negotiations everyone!
Scott Ingram: For more insights from the professional buyer’s perspective. Definitely check out Mark’s book: “The Other Side of Sales,” and as always we’ll have links to that and more for you at DailySales.Tips/888
Once you’ve clicked over there, be sure to click back here either to continue your binge or for another great sales tip tomorrow. Either way, thanks for listening!