Why customers buy enterprise gear by price alone?
We have seen countless discussions, debating this topic to death. Google it, you will most certainly find that every article and post ever written, claims that customers never buy a product because of price alone. In a nutshell, lowest price doesn't always win.
And yet, if you are a sales guy, I'm sure its happen to you more often than you would like it to...
Before you start hammering in the comments, I'm not saying that all customers are such. There are certainly customers that don't make decisions because of the dollar value but for all those that do, here are my 2 cents why price was a major consideration.
Basic requirements
If you wanted to buy a car, and the real intent is to get from Point A to Point B. There is really no additional value you can bring to the table as a seller between a $10,000 option and $100,000 option. Short of looking cool in a $100k car, essentially its a nice to have. When all the customer needs is a basic feature that is fundamentally provided by any product, you would often have to work hard to get them to buy in on the other bells and whistle.
So if the same 100k car is now discounted to 10k, with the same features and capabilities, it makes little sense to go with the original vanilla 10k car. Who doesn't like to feel as if they've got a deal?
Culture
If I were to sum it up, many enterprises today consistently wants to do more with less. More transformation, less technology spend. The promise to leadership is often to deliver an outcome, however when the message is distilled down to downline managers / staff, all they hear is “meet the budget”. All too often, this "budget" isn't quite aligned with what they want to achieve as an end goal and middle managers are often not empowered to challenge this because they lack the larger picture.
In the end, as a seller, regardless of what additional value the solution brings, its negated by the culture of costs propagated by the culture within the organisation.
Skills Gap
Which brings me to my next point around skills gap. This cascades all the way down from leaders to middle managers to operational staff. If you had a CxO that blindly wants to do transformation and blindly assigns a budget, that flows down all the way down the chain (as per my previous point, cost pressures cascades).
This also happens if you had a middle manager that isn't competent with a project / technology and have been asked to evaluate a solution fit, the surest and simplest way to evaluate is, a comparison of price. Not much skill required...
What's in it for me?
Lastly, everyone has a motivation and agenda. I don't think that we need to elaborate on this point too much. Will I get a pay rise for meeting the budget delivering a bullet proof solution? I'm not paid enough to work day and night with multiple iterations to evaluate the best solution for my organisation. If the organisation wants a “cheap” solution, I will pick the cheapest from the vendor that ticks all the boxes and the list goes on for various other reasons.
At the end, how do you over come this?
You either change yourself or change the situation. If you know that you are going to be dealing with such a customer setup and you want the sale bad enough, you have to adapt your game to theirs, provided you are able to. Alternatively, know when to walk away from the sale. This is difficult for many because it's ingrained in many sales reps to keep pushing. However, sometimes if you just step back and consider the opportunity cost, the picture becomes a lot clearer.
