4 Ways Salespeople Can Win at the “Moment of Truth”

By Vendavo
July 30, 2013

B2B selling has changed forever. Buyers are fiercely independent, highly social and connected, and more educated than ever. Deals hinge on the “Moment of Truth;” the quote; the negotiation; the deal that happens on the front line.

For many companies, the profitability of each deal depends on a combination of seemingly small decisions that happen at the point of negotiation – size of the discount vs. the size of the deal, where the product will be shipped, the total market basket, etc.

But even in the hyper-connected age that is 2013, most B2B salespeople still don’t have the tools they need to be effective when they are in front of the buyer. This is simply too much for any single person to track, so most salespeople have no clue whether the deal they are quoting is profitable (at least not until it’s too late).

Instead, most salespeople are sorely unprepared when it comes time for the negotiation, especially when facing a well-informed buyer (the norm rather than the exception). They price with their gut, waste time searching for data, can’t defend their quotes, or worst of all – lose deals waiting for approval.

So, here are four ways salespeople can win at the Moment of Truth:

1. Provide Targets:

Setting target prices or the price the sales rep should aim for during negotiation for a given volume of product, can provide an anchor for the negotiation for both the sales rep and buyer and can drive improved outcomes.

Anchors are recognized as a very powerful phenomenon in behavioral economics. I recently attended a conference where the presenter asked the audience to take the last four digits of their SSN and turn this into a price by putting a decimal after the first two digits. Mine was $21.62. He then asked the audience to guess the price of a bottle of wine. As it turned out, this completely arbitrary price had a very real impact on the price each person assigned to the wine. I guessed around $25, while others guessed as much as $80.

This demonstrates that setting a target price (or discount) a salesperson should aim for can create a “gravitational pull” towards an overall deal that is more profitable.

2. Segment Your Customers:

The only thing more powerful than a target price is an “optimized” target price. Every salesperson knows intuitively that different customers value products differently and, as a result, are willing to pay more or less. While a customer’s vertical can offer some guidance, determining “willingness-to-pay” can be difficult. Is this discount the customer has requested simply a sign of hardball negotiation or a signal of a lower perceived product value?

Lucky for you, sales history holds the answers. By segmenting your customers and plotting deal prices for a given product according to price and volume, you may see that in some segments customers are paying much more than in others. This is a signal of higher willingness-to-pay. While scientific optimization can become very sophisticated, very quickly, you can gain tons of insight by doing simple customer segmentation and seeing how prices differ among segments.

3. Make Approvals Easy:

With the consumerization of the enterprise, telling your buyer “I’ll have to get back to you on that” is no longer acceptable. The company that can quote on the spot and get a deal approved will often win. This means you need a process that can quickly manage dynamic approval in real time. Give your salespeople authority to provide discounts up to a certain level.

For anything above this amount, provide clear guidance for who needs to approve. If the salesperson knows that anything over 25% requires a VP approval, this may discourage excessive discounting. Lastly, it’s key to remove friction from the process as much as possible so that quotes that do indeed need approval quickly get to the people that need to review them. The holy grail is a system that proactively alerts the approver when there is a pending request. No salesperson wants to lose a deal because their manger took too long to respond.

4. Know Competitive Prices:

Knowing competitive prices for similar products can mean the difference between holding the line on your price and giving a huge discount. Without knowing the market price, salespeople cannot confidently stand behind their prices.

Getting started doesn’t have to be complicated. Your teams can start by sharing competitive prices with the team, as they hear about them. At one company we worked with, the Sales team leveraged an existing tool – Salesforce Chatter – and began posting competitive prices every time they met with a customer. The result was that a sales rep could do a quick search – even while still onsite with a customer – to check what competitive prices their peers had been hearing before quoting the customer.

  • anchor , approval , moment of truth , salespeople , segmentation , win


    Vendavo powers the shift to digital business for the world’s most demanding B2B companies, unlocking value, growing margin and accelerating revenue. With the Vendavo Commercial Excellence platform, companies develop dynamic customer insights and optimal pricing strategies that maximize margin, boost sales effectiveness and improve customer experience. With an annual margin improvement totaling more than $2.5 billion across companies in chemicals, distribution, high-tech and manufacturing, Vendavo delivers cutting-edge analytics and deep industry expertise that help companies stay one step ahead. Vendavo is headquartered in Denver, CO and has offices around the globe.