| 1. I learned long ago the only way to use low | | | | approval. S/he is thinking the job will get done and |
| pricing as a strategy is if you are the low cost | | | | that's that. |
| producer. In this way you can outlast your | | | | But what if one competitor got to the ultimate |
| competitors by losing less. Once they are out of | | | | decision-maker and knew what part of the apple |
| business, you'll own the market and can charge | | | | was valued more. What if that competitor had |
| what you'd like. | | | | advised the ultimate decision-maker to compare |
| 2. The other thing I learned quickly from Hard | | | | that aspect among alternatives? That competitor |
| Knocks University is that senior level executives | | | | would have an edge because s/he would have |
| (the people that make the final-final decision) do | | | | emphasized that aspect. Then the choices would |
| not care about the lowest price. They do care | | | | probably look differently. The subordinate would |
| about affordability however. Don't get the two | | | | have to justify accordingly or select the |
| confused. | | | | competitor who had learned the really decision |
| 3. C-Levels and P&L leaders value business | | | | criteria. |
| results more than they focus on price. Whoever | | | | 6. Once a C-level or P&L leader is committed |
| is seen by the leader as a resource - helping him | | | | to an expenditure or investment s/he will say to |
| her do business better, will get the contracts. | | | | the subordinate, "Do it and get a good deal." |
| What's tricky here is that you need to know | | | | However, the subordinate interprets "good deal" |
| what specific business results the leaders value. | | | | usually as the low price among the reputable |
| Thinking they all want the same things will send | | | | suppliers. The best way to get lowest price is |
| you down the wrong path more often than not. | | | | bidding - commodity mentality. |
| Each leader has his or her specific, subtle or | | | | Someone has to say, "Boss what's a good deal |
| profound agenda. In order to eliminate price as a | | | | look like to you?" Subordinates usually don't ask |
| deciding criteria and to value price, you'll need to | | | | that question. They fear they'll be perceived as |
| know that agenda exactly. Just as importantly, | | | | out of touch with the business issues. So they tell |
| the leader will have to know you know his / her | | | | everyone what they think the boss thinks is a |
| agenda. | | | | good deal. To avoid bad information the sales |
| 4. Don't be confused that a formal request for | | | | person has to ask the boss directly what a good |
| proposal to all competitors will mean the buyers | | | | deal looks like. |
| are comparing apples to apples. Some aspects of | | | | 7. Unless someone gives the boss a compelling |
| the apples are more revered and valued by some | | | | reason to pay a higher price or change what |
| high level people than other aspects which are | | | | they're now doing, they will go low price or remain |
| touted by low level people. How many times have | | | | with the current situation. Even if the operations |
| you said - after losing a bid, "If I had only known | | | | people say, "This would be great," the P/L person |
| they were really emphasizing that part of the | | | | will say, "Unless the business is threatened, let's |
| spec?" or something to that effect. | | | | get along with what we have." "Unless someone |
| 5. If the subordinates have blocked all sales people | | | | gives me a compelling reason, there is no need to |
| from the getting to the final decision maker, all | | | | spend more." This is why it's so though to |
| competitors will look alike to that leader. The | | | | introduce new technology without framing it |
| subordinates pick their choice and submit the | | | | around the boss's success factors. |
| recommendation (usually informally). The ultimate | | | | And now I invite you to learn more. |
| decision-maker gets some assurances and gives | | | | |