Everyone has a choice. Buyers have a choice and sellers have a choice.
The choice is to talk about spending less or making more money.
Someone on a “self-improvement” tape said to focus on what you want. If this is wise advice and it is carried to the extreme there is some point where to spend less is to spend nothing and it is not logical to think a business is competitive at a point it spends nothing.
Salespeople must not have access to this thinking since they keep selling the value of “spending less” and asking their boss to give bigger discounts to increase “the value by more spending less”. (Is spending less really value?)
But if salespeople don’t understand this thinking they have a lot of company. Purchasing departments and other buyers keep asking everyone to dive to that point of spending nothing.
At the extremes, there are two options. What you need to buy is a pure commodity (I doubt most people can even name one pure commodity) where nothing but the commodity and the price mater (no deliver, no time considerations, no warranty, no payment terms, no service requirements, etc.). Let’s pretend there are some pure commodities where only price matters. Where is that point where sellers will stop selling when there is no profit for them? At that point, a buyer asking to spend less is in a conversation with “NO ONE”.
That situation must mean the buyer who needs to spend less to survive no longer survives because there is “NO ONE” to sell for less? That must mean everyone is out of business and the buyers’ customers no longer can acquire what the buyer used to provide them. This sounds bad for all parties.
What happens if the sales people and the buyers have the “other” conversation. This conversation is about what to do so both parties make more money. What would that look like?
Might they be considering how to partner to solve the buyer’s problems in manufacturing, supply chain, logistics, quality, new product development, warranty costs, joint marketing, new markets, speed to market, inventory levels (finished goods and raw material) and maybe most important, how the seller could add more value to their customers creating a bigger revenue pie that is more stable over time.
There is an excellent book you may want, The Three Rules: How Exceptional Companies Think …
The research in this book stresses that long-term success is about making your customers and your customer’s customer more money, not help them race to that point where there are no more discounts for buyers or sellers.
Make the pie bigger for all players because with the same available capital (budget) you delivered more profit (new money) to all players in the game.
Make the choice to talk about everyone making more – MONEY!
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