October 14, 2011

‘Your stuff looks great, but I need a lower price.’ Every sales rep in every sales force in every distributor hears this statement or some variation of it virtually every day. Buyers are trained and paid to drive prices downward, and the fact is most are quite good at it. So what’s a distributor to do? Get used to it, because it’s a fact of life? Train the sales force (again) to be tougher negotiators? Hold firm and ‘fire’ those customers that refuse to play along with your margin objectives?

Each of those alternatives is viable. All of them have been and are being tried. As far as I can tell though, price pressure is not going away or even becoming less severe. Maybe there is another angle. Think about classifying the value proposition for each deal you offer on a 1 to 6 scale. …