When a Salesperson Should Stop Selling Value

SQC smallProblem:  Recently, I had a conversation with a sales engineer about his frustration with trying to convince a prospect the price of his equipment was worth the value.  His prospect is convinced that he is selling high quality, efficient equipment with a large ATBM (Average Time between Maintenance).  Though his prospect faces frequent interruptions due to breakdowns, the prospect continues to buy his competitors’ equipment because their prices are lower.  The prospect continues to tell him that he can’t justify the capital investment needed to buy his equipment.

This sales engineer is concerned that the prospect is not evaluating the low running cost with his equipment or the losses he incurs due to production losses with the competition’s equipment.  He told me that he feels that his problem is that he is not able to change the mindset of his prospect.

Solution:  This first thing I told the sales engineer is that he doesn’t have a problem, his prospect does.  I stated; “Don’t take ownership of HIS problem. He has to own his problem and once he does, you can help him solve HIS problem.”

I suggested that he try to have a conversation around the cost of acquisition vs. the cost of operation.

I went on to explain; “A piece of machinery costs X dollars to acquire.  This is the cost of acquisition.   To own and operate that piece of equipment is the cost of operation.

It appears his prospect has a clear understanding of the cost of acquisition.  I suggested he stop trying to sell the value of his equipment and have a dialogue with his prospect that starts with this question;  “If you and I walked to the back of your plant and there was an employee taking handfuls of cash and throwing it out the back door, what would you do?”

Usually they state; “I would stop them!”

Your response; “Really, I find that hard to believe because that is exactly what is going on right now in your business – the problem is you don’t see it.”

“Buckets of cash are being thrown out the back door.  In manufacturing, it is called Cost of Operation.  Have you conducted a cost of operations analysis?”

Typically their response is:  “No”

“Well, until you do I cannot help you close that door.  In the absence of seeing what it costs you to manufacture a piece of equipment, you don’t see the money you are losing.  You see the money coming in – the sales orders; you see the money going out – expenses.  What you don’t see is what happens to the money while you have it.  I suspect you are paying your bills but may be frustrated your profits are small, tight or shrinking.  Am I correct?”

“Are you open to the idea of figuring out what the cost of operations is on the equipment you are running?”

If they respond “yes,” then state:  “When I am done with the analysis and am able to show you that by changing the type of equipment you purchase in the future will add to your profits; are you willing to invest more in the acquisition side to generate more money on the operations side?”

If they say “yes” to that, you state:” How much savings will you need to see… keeping in mind that the savings are on-going and compounding… in order to invest more on the acquisition of equipment?”

You have to evaluate whether or not their expectations are realistic and you can meet them.  If yes, proceed.  If not; move on.

When you are getting resistance to selling your value, take a step and step back, and figure out where the resistance is coming from.  Sometimes it is the prospect themselves and their inability to understand value.  Your challenge is not to take ownership of that but to get them to see it.

Good Selling!