In the above video, Terry Slattery discusses the intersection of cost, price, and time in a high-value sale. He gives some examples of the difference between price and cost, and offers some ideas for the salesperson to shift the discussion from up-front price to true total cost.
As Terry discusses in the video, "price" tends to be short-term; the cost and consequences, however, tend to be longer term over time.
It's the element of time that tends to help us leverage the difference between price and cost.
For example, in capital equipment, there's the price of something up front. And then there's the price of using that something over its useful life. Those will be two different sets of numbers.
And of course, one side wants to focus on price. (Usually the Logical Customer!)
If we can get cost involved, it tends to favor the high value player. Another example would be in the area of - I do a lot of work in the area of employee benefits. There's the price of those benefits, but there's also the cost of those benefits over time. And those again are two different sets of numbers and the effect on everything from the employer's financial health to the employee's physical health is involved.
So price can look very economical up front, but it could affect costs over time.
We work in a lot of areas with our clients where their prospects are planning to make an investment today, but the total cost of ownership can be affected by how flexible and adaptable the fit is over time, as the business requirements change. Somebody may have a killer fit if all you're going to do is use it for a little while and slam out parts. But if you're going to be using it for a lot of different customers and different applications and flexible manufacturing, those kinds of things, then you wind up with a much more expensive up-front solution, but a lower cost over time.
It's about the fit as well as the expertise, and again, that element of time.
We see them all the time underestimating the cost in training their people to keep a solution current and useful because technologies adapt and just the concentrating and updating of it becomes a cost of ownership issue. And again, the low price guy may cost more to keep it current and again, be less flexible and less of a fit.
So one of the questions that we find really useful is when they say, "What does this cost?" You know, you're early in the discussion and they're after you about, "What does this cost?" You say, "Well, how accurate do I have to be?" Which would be the first question. And then of course you could have a lot of fun with the answer to that. And then the second question: "How long does it have to be productive for you?"
As soon as you do that, you've again shifted the focus to a longer timeframe, which tends to favor the high-value competitor.
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