Send me your pricing. The machines will never win. Fashion show time! Gotta love marketplaces. How would you fix it?
V.I.C. - Issue 62
Business & Money
In sales there’s an all too common situation where a potential prospect will ask you to share pricing very early on during the sales process. Sometimes even before they’ve done any homework on the industry or seen a demo of your technology. There are a couple ways to respond to this situation.
1 You can send them pricing.
2 Politely inform them that you cannot share pricing until you have a better understanding of their requirements.
When I was just starting in sales, I often opted for response #1. We’re already at pricing discussions? Sounds like a great way to close a quick deal and get a nice commission check. What I’ve realized over time though, is that less than 20% of deals close when you share pricing prematurely.
First, hopefully you’re not selling a cheap commodity product where you have to compete on price. If your solution is valuable, it’s likely priced at a premium. Thus, if the prospect is simply going to line up a bunch of proposals side by side and choose the cheapest option, you’re not going to win. No reason to waste time drafting a proposal.
Second, any brain dead salesperson can prepare a proposal. If you’re planning to separate yourself from the pack, then you not only have to differentiate your product, but you also have to differentiate yourself as a valuable partner.
Thirdly, if you actually do have a great product, you might lose out on the opportunity to demonstrate how it will deliver value to that particular prospect. They might decide to go a different direction solely based on price, all the while being completely unaware of how revolutionary your product will be to their business.
Lastly, even if you do close the deal, there’s a pretty high chance that your proposal was way off base since you didn’t take the time to properly asses the customer’s needs. As a result, you and your company may lose trust and credibility with the client. It looks like you tried to pull a fast one and were dishonest about the real cost to own your solution.
Today we live in a world of filter bubbles. That is, we curate our digital existence so that we’re only ever served up with information that confirms what we already believe. But this doesn’t have to be the case. Take Spotify for example. They offer up daily and weekly playlists that contain a good balance of artists that you have already liked with new ones you may have never heard of. And since these playlists disappear at the end of the day/week, you are further incentivized to listen when you see a new one pop up. While seemingly simple, what they’ve done is leverage powerful recommendation algorithms to present you with music you’ll probably like, while at the same time using innovative product design to encourage exploration into uncharted territory.
And if you read into this closely, herein lies the reason that computers and machines will never replace all human labor. It appears devilishly hard to program thoughtfulness into our technology. Thus, we will always be a crucial part of the equation.
My fiancé is currently in Nicaragua for a community service retreat with her company. Before she left she wanted to show me a few new clothing items that she’d purchased for the trip. Fashion show time! As she went into the other room to try on the first item, I began reading an article on my phone. When she came out to show me the shirt, which happened to have trendy holes randomly throughout (hipster!), I looked up from my phone to give my opinion. As she spun around to show be the back, I caught myself taking quick glimpses down at my phone then back up at the shirt.
When she left the room to switch to the next outfit, it hit me. I was not being completely present. I was not giving her 100% of my attention. She was preparing to leave on a week long trip and I couldn’t put my phone down for 5 minutes to be in the moment. What a selfish jerk! I clicked the lock button, put my phone down, and was fully present for the remainder of the fashion show.
I think this scenario is all too common in today’s world. We allow our devices to distract us from what’s really important. Luckily I was able to catch myself in the above situation, but I’m sure there are countless other times where that was not the case.
My Latest Discovery
Last week Etsy launched Etsy Studio, which is a new marketplace for craft supplies. Instead of heading to Michael’s or a similar retailer, Easy creators can visit Etsy Studio to source all of the supplies they need for creative projects. What’s really compelling about this launch is that a retailer like Michaels might carry 50,000 SKUs. Etsy Studio will carry 8,000,000 SKU’s at launch and will quickly grow from there. That’s 160x the inventory.
You can’t help but love the marketplace business model. It has brought incredible progress to countless industries. We have Uber & Lyft in transportation, AirBnB in hospitality, Angie’s List in home improvement, Gigster & TopTal in software development, 99designs in graphic design, Craigslist in classifieds and many many more. I wonder what will be next.
Question Of The Week
These days you here a lot of people talking about the perils of social media. Some of the complaints are that too much power is in the hands of a small number of companies, those companies don’t share revenues adequately with content producers, filter bubbles, fake news, etc. My response to most of these is to try to change the nature of the conversation. Instead of just talking about what’s wrong, let’s talk about how to fix it. So:
Knowing everything we do in today’s world about social media, or let’s just start with Facebook to me more specific, what would you do to fix the problem?
It’s A Wrap!
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