Don’t Let Price Become Your Differentiator

When was the last time you were delegated to the purchasing
officer while trying to close a technology sale? This is a
common complaint among technology value added resellers (VARs),
and a growing problem as technology continues to commoditize.
Let’s face it, computers, networks, and common software
applications are no longer viewed as high-involvement purchases.
Price has become the differentiator. But how can you reposition
yourself to avoid this delegation process?

Michael Bosworth, in his book Customer Centric Selling, says
that, “We are delegated to the people we sound like”. In other
words, delegation is a symptom of a greater problem in the VAR
organization. If you are selling commodity product, then it
makes sense that price will become the determining factor when
the purchase is made. If you sound like a product salesperson,
you are bound to get pushed to the product purchasing group.
What happens when you reposition your product? Take the area of
network security as an example. A buyer can purchase any number
of firewalls on the market today. Some sold through companies
like yours, while others are carried by discount computer stores.
To the average end-user, both provide the same benefit; they keep
unauthorized users out. But you can reposition this product by
uncovering the value and sensitivity of a customer’s data and
asking the question, “Can my client detect and stop an intrusion
before their digital assets are compromised”? I would argue
that very few of them can. If you can prove that people are
attempting to access systems using spyware, Trojan horses, or
other types of malicious code, you can demonstrate a need to
look further than a hardware firewall. In fact, with today’s
assessment tools, in a matter of minutes you should be able
to show a customer that they need a greater level of data
protection. This is not likely to get delegated to purchasing.

Taking this approach, there is a small percentage of buyers that
have identified a need and are looking to buy technology. There
is a much larger group of potential buyers that don’t really
understand the need I just identified. In just about every case,
the first buyer is also working with a provider to solve the
issue. The remaining potential buyers don’t understand that they
have a need simply because no one has been able to show them the
problem. This is where your value proposition replaces price as
the point of differentiation. In my example I pointed out that
most companies lack the ability to detect and respond to an
attack against their data. This same group of companies is
largely unaware of what threats are real, and what measures
should be taken to prevent a compromise to their data. Every
one of these companies represents a potential buyer.

Value proposition is an over used phrase; however, this is where
the majority of VARs are losing opportunities. With tight
budgets and a focus on getting the business done, VARs cannot be
order takers; they have to become consultants. This means having
enough understanding to show an economic buyer their need and
having the ability to guide that buyer through the process of
implementing the solution. This is intellectual capital and it
is the only margin sustaining product a VAR can offer. If you
are stuck in the purchasing office, you are not positioned with
the right value proposition and you have not demonstrated that
you have intellectual capital worth paying for. The first step
is restructuring your sales approach around the business problem
you are trying to solve. Once you have a solution that addresses
a real business need, you can then demonstrate business value to
your prospective client. Equipped with the right solution, VARs
can stay away from the purchasing department.

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David Stelzl, CISSP is the owner and founder of Stelzl Visionary Learning Concepts, Inc. providing keynotes, workshops, and professional coaching to technology resellers. We work with executive managers, sales people, and practice managers who are seeking to become market leaders in technology areas that include Information Security, Managed Services, Storage and Systems solutions, and Networking.