As a business leader, there are a lot of times when you have to take a decision on pricing which results in losing a deal.
I have had to take many such decisions and the sales persons involved in the deal get really upset since they misses their target because of that decision.
See, its very easy to discount to win a deal, but if after winning the deal you’re not able to execute because it’s way out of budget then you get a terrible name. In B2B, if you fail to deliver or deliver badly, then you can be sure that you will not get business from that company again and if the manager involved in the decision , goes to some other company, she will ensure that you do not get business from there also.
I have had a couple of instances where we lost the order, then the vendor who was awarded, did not deliver and after one year of struggling, the customer called us back and gave the order without any negotiation.
And since we did a good job there, they gave us multiple more cases.
The advantage of B2B is that once you do a good job, then generally, the managers want to keep working with you. The inertia and the political situation in the organizations mean that a manager doesn’t want to try a new vendor if she can.
So even if you have to lose a deal, its okay because you will get many opportunities to win. But if you do a bad job, because you don’t have the money in the deal, then you will lose the client forever.
Till next time then.
I was watching a video on Netflix, The Call to Courage by author & researcher Brene Brown today afternoon. Its about 80 minutes long, but she keeps you engaged all through the eighty minutes. Her talk is about vulnerability, shame etc. and all its various connotations. I had read a lot about her books, when reading other authors, but never quite got to the stage a actually reading one of her books. Today while doing some research on her, I actually found this video on Netflix, so I decided to spend time watching it. it was time well spent. I would highly recommend watching it. I have downloaded it so that I can watch it a couple of times more.
While there are a lot of Aha moments in the video, one which kinda stuck with me is a statement she made – Success is all bout doing the hardworking and taking chances. You could fail, but its about getting down into the actual field and playing and then figuring out how to win. You can keep sitting in the stands and comment about how things should be, but its all about playing which decides if you have the chops to win.
You cannot lose any game that you don’t play. A lot of us, including me a lot many times, take the easy way out because our brain does not want us to lose. Its hardwired to protect us at all costs. So even failing in front of others is a major set back to our brain. I have written about this in multiple posts over the years. But she put a different perspective and therefore I am recommending, watching the video. It will be time well spent.
Most of the times its our brain, which is the actual culprit – because it doesn’t want us to take chances. When I was watching the video I could recollect so many situations, where I din’t take a chance and maybe things would have turned out to be different. But then that’s history….
Till next next time then…take your chances…don’t have regrets in your life.
In yesterday’s post I spoke about how the human brain’s resistance to lose, makes the job tougher for a product management person to get a new product into the market. Nobody wants to be seen as a fool in case something goes wrong. The hurt of losing is very acute.
On the other hand there’s a positive side for the marketing person to utilise. Since marketing is applied psychology, you need to use this same concept to your advantage. That’s how brands are built. They are the trust / the promise that a user feels, when buying something from a known name (brand) versus buying an unknown name.
In the B2B space, therefore once you have entered into an account and done an excellent job, you need to spread your tentacles and try to do as many things as possible. Since the customer trusts you, they will prefer to first come to you to check out before going out into the market to find a new vendor.
So while getting into a B2B customer is tough, once there and if you have done an excellent job, the possibility of doing long term business is very high. So when looking at a B2B customer, you need to look at the lifetime value of a customer before taking any decision of refusing an order. Especially if it is at the time of entry into the account, you have to keep this dynamic in mind. Even if you have to make loss on a one time deal, for the first time, you should pick up the deal, provided you are clear that they do a lot of buying where they will involve you. You can then make up for the money you lose, by getting a logo to brag about in your brand building as well as the long term revenue possibilities.
You will also sometimes come across customers who will always want you to lose. For those types of customers, you should be ready to leave them at the earliest.
But coming back, the same feature of the brain which causes us hurt can also be used to increase revenues by ensuring that the customer realises why they trust you versus trying a new vendor.
Till next time then.
I had written two posts on my practical experience the other day on how not getting one packet out of the two I had ordered….made me feel bad while getting a complementary gift from the company which was roughly 8 times more in terms of value did not cause me as much joy.
This has a lot of implications for us marketing folks, whether you’re in product management or brand management etc.
Once people have experienced your product or service, then they would not like to try another brand. This is especially true for high value items. Since most B2B procurement tends to be high value, there’s an even bigger inertia to change. No one wants to feel or be seen as a fool who took a wrong decision.
Since our brain feels the loss more acutely, if something goes wrong with a decision to take a new vendor, the manager who took the decision will lose face. They may have taken a lot of right decisions but one wrong decision will keep haunting them. So they would rather go with the tried and tested vendor even if the technology they have is old or product is not as good as yours.
As a product manager , you need to figure out how you will find those companies who have a management which is willing to take risks with your new offerings, if you are coming for the first time in the market. On the other hand if you already have customers, you should always take your new offerings to them to try out. Since they know you they might be willing to experiment with your new offerings.
We will continue on this topic further in tomorrow’s post.
Till next time then.