Part IV (Continuation from the Case Study in Part III)
Situation # 2: Overcoming Early Questions about Price
During the initial meeting with an executive, the question of cost comes up. The executive is still in the Whether to Act phase. The sales person knows the prices paid by past customers, but is afraid that if he/she says how much, the executive will get sticker shock and lose interest (and rightfully so). The salesperson is looking for ways to address the cost question without appearing evasive.
How should the salesperson respond?
First, reply that the cost of services depends on the nature and breadth of work that is done. You don't know anything about their organization, their current state, or the information and knowledge that already exists. You have no idea what it would cost, but you do know that one of the first steps in any engagement is to quantify the opportunity so that program investments can be put into context.
Second, when one talks about cost, one has to take into account the total cost: investment of customer resources, purchased services, cost of new hires (if any), cost of developing and validating new protocols, etc. Every customer's implementation path is unique to them - with different balances of new and old processes, in-house and contracted work providers, manual vs. automated systems. Again, how can you know cost at this juncture?
Third, you're not trying to be evasive, it's just that at this stage with no goals and implementation path set out, it would be irresponsible to put something specific out there. This isn't a product or a piece of software; it's a change program (or solution or transformation or whatever). The first step is to explore with the executive team whether this program even makes sense given the company's strategy, resources, and current priorities. But, you can say, that if either the opportunity or the costs to realize that opportunity don't make sense, you'll be the first to say so because you don't want to waste their time or yours pursuing something that ultimately won't stand to reason.
Finally, if you are still getting pushback, say something like:
"...Look, companies that are serious about this <transformation> consider it a strategic investment. That means in order to realize the vision, it takes both a significant management commitment and a significant financial commitment. You can't get there otherwise, at least not any time soon.
"The first steps are very low cost, and are designed to frame and quantify the opportunity, lay out the path to get there, secure the buy-in of the stakeholders, and define what it will cost all in all in to reach the desired state.
"Each step in the process is designed to inform the decision about whether or not to proceed to the next, as each step will involve more significant investment, inside and out. Getting started, if it makes sense to do so, it is typically a high-five digit figure (or whatever the range). Before that work is done, you'll have a sense of your current profitability for these procedures, how much opportunity exists for you to improve that profitability, and some insight into what it will take your organization - with your leaders, your docs, and your processes - to move the dial. If it's worth it, you'll continue, with or without us. Worst case, you'll end up with some short-term improvement opportunities that you can take advantage of to eek out some extra profits from your current processes."
And, lastly, remind them that all you're trying to do now is decide whether it's worth everyone's time (your executive team & theirs) to have a sit down meeting and explore the potential of the programs.
If the prospect is pushing back on the fact that you're not giving him a price, but not pushing back on the idea's relevance, the truly sophisticated sales person can employ reverse selling. It works like this:
"I don't sense your organization is ready for this anyway. Our work is transforming the economics of what is arguably the fastest growing service line in the hospital. Payment processes are on the verge of major change - which is going to cut the financial legs out from underneath the least profitable hospitals, but they won't know it until after it's done. Our clients seek to be leaders in their local markets; specifically market share leaders and financial leaders. They're smart business people. If it's this hard to even get a conversation about what's possible, I can't imagine how hard it would be to get people to actually do something, make a commitment, or drive change. It seems like there's too much inertia at this time, or too much focus on the little spending decisions at the expense of the big financial elephant in the room."
Granted - it takes a very confident sales person to use this approach. The point, however, is that the sales person has a lot more power in the early phases of the customer engagement cycle that they don't have to fall into traditional patterns of acquiescing and defensiveness. Your company is bringing an opportunity to the table and seeks only to be treated with respect and courtesy as you decide whether this opportunity is worth exploring further.
So by now you should have a good idea of how exercising the power of intimacy can benefit the sales cycle. Giving a sales person the tools and self respect to reframe questions about price, experience, and track record will give them the confidence they need to truly sell value, which is what True Solutions are all about.