4-Element Selling. Compete on All Four to Win!

Say ‘diametrically” at a cocktail party wearing a black turtleneck and a raised eyebrow for effect? Smart. Sitting across from procurement talking RFx…? It’s Kennedy vs. Khrushchev. Because the other half of the phrase is “opposed.” Diametrically Opposed.

All too often we’re in sales cycles where buyers force standardization and sellers do their best to differentiate. It’s common enough and filled with protracted meetings, high SG&A, needless lunches, dinners, account planning, inaccurate forecasts… Huzzah. And the irony is that buyers want the ‘best’ bundle– they want a differentiated product!

This adversarial approach can be mitigated, in part or in whole, and differentiation can be achieved effectively, with a holistic understanding that products are essentially comprised of four elements.

Typically, these structural components are implicitly bundled. But conscious, purposeful combinations of these elements provide a transformative path from adversarial to win-win, collaborative deal-making. The four elements are:

  • Pricing

  • Service

  • Contract

  • Feature  

Which elements do you think most sales teams are trained on? Yes! Pricing, and features. Service is rarely a negotiated differentiator. And ultra-rare is the company where contract structure is considered part of the product.  Consider these elements as faces on a die with each side linked to the other– customers don’t get one without the other three. And the great news is that your competition is most likely mired in price and feature-benefit pitches. Let’s dig into it:

Pricing structure- is the sum of cost of the support, contract, and feature expense you provide to your clients. I say structure, because while it’s true there’s a unit cost, that unit cost is variable based on term, volume, and other variables. In the table below I’ve excluded discounts to highlight the other meaningful elements that can be traded. It’s important to close down negotiation so that discounts aren’t thrown in at the last minute!

            Buyer Wants…                                  Seller Wants in Exchange…

            Lower Price                                       Longer Commitment

                                                                      Larger Commitment

                                                                      Lower SLA

                                                                      More Features

Support Structure:  Support can range from email response to live phone response, larger account teams, better SLA’s and generally focus on the customer experience during the implementation (first use) and certainly after. It’s common to trade a higher price for better service, and note that term and volume come up again.

            Buyer Wants…                                 Seller Wants in Exchange…

            Higher Support                                Higher Price

                                                                     Longer Term

                                                                     Higher Volume

                                                                     Public Relations Clause

Contract Structure: Contracts define how we want to do business, once we’ve agreed to do business. They limit risk and provide pre-negotiated means of conflict resolution if a relationship breaks down. Below are a number of more common give/gets I’ve seen. Seller side trades include, but aren’t limited to, price and contract exchanges.

            Buyer Wants…                                Seller Wants in Exchange…

            Termination for Convenience         Higher Price

            No Late Payments                           Prepay

            Higher SLA’s                                   Higher Volume

                                                                    Longer Term

                                                                    Exclusivity / First Right of Refusal

Product Structure: Product structure includes everything from the features, packaging, speed of delivery, frequency of delivery, and is the market bundle offered at a price, service, and contract point. Generally, the more custom (vs. configured) a deal is, the higher the price, the slower the delivery, and the longer the commitment.

            Buyer Wants…                                 Seller Wants in Exchange…

            More Features                                  Higher Price

                                                                     Faster Payment

                                                                     Higher Volume

                                                                     Longer Term

Thought Experiments:

  • With Price, Support, Contract, and Product as column headers, write under each what you consider your product to be. How could prior deals have been improved by explicit bundling of these elements earlier in the sales process?

  • Inventory common customer requests at the back end of your sales process and categorize them by Price, Support, Contract, and Product. To what degree do these late stage requests represent what your customer thinks your product/offer is? To what degree could the sales cycle be shortened and differentiation achieved if these elements were discussed earlier?

“Diametrically Opposed” is high effort, expensive and slow. Sell holistically with the 4-Elements and reap the benefits of collaborative deal-making!

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