Selling Benefits Is Wrong! Highlighting Risk in Commodity Buying & Selling

Avoiding Risk in Commodity BuyingWhy Selling Benefits Can Sometimes Lose You Sales … Especially the Risk in Commodity Buying .. and Courses are a Typical Commodity Buy

Enlightened salespeople will tell you to focus on sales benefits and not features .. ie sell the sizzle.

So you are encouraged to focus on the increase in sales that your software produces rather than its powered by twin-axial quadrons.

Or on the companies that use your software and how its impacted their bottom line.

95+% of the time this makes sense .. until it doesn’t. And when it doesn’t it costs you sales.

The thing is people don’t always buy benefits. Sometimes what they need is far more.  And if you are selling FE products .. say full cost courses this can make a huge difference.

An FE Example of Selling to Employers

One provider I worked with was called in by the Training Director of a multinational. They were paying £9800 per training session to a large “private” quoted training company for a particular course. They were looking for an alternative.

So my client decided to pitch their course at £8900 .. it still provided a good margin, and it would save the client money .. and that has to be a definite benefit!

But I knew this multinational and the Training Director was risk averse. I wondered if he was after a lower price or if something else was driving this.

It turns out that his supplier had issued profit warnings and there was a question about their viability. Going with them was a risk.

Softening the Risk in Commodity Buying

Armed with this the provider went back with a proposal. In their next meeting they said they would offer a discount and match the existing supplier’s price and added one small extra nugget of info.

They said that as a “publically funded” college they were funded by government and no public sector college had ever gone out of business. (True some colleges have gone into administered status, but that is different to administration).

What they did was derisk the supply side of the equation without relying on the benefits of a huge price drop.

The Perceived Risk in Commodity Buying

Perceived Risk is a huge problem for many buyers. It used to be that being big was enough to argue this away. But since then many big companies, in many sectors, have gone bust. The perceived risk is much lower when a buyer can Google for “colleges in administration” and not find any!

I’m not advocating the funding approach to this .. just quoting an example from a few years ago. Under the Technical & FE Act, things have moved on.

But what I’m trying to emphasise is that your “pitch” needs to be on minimising the perceived risk of working with you. And that might mean subtly inferring increased risk with working with others. In the above case risk was already on the agenda .. even though the college hadn’t picked up on it initially. 

The moral of this is that you need to spend some time standing in your client’s shoes before assuming that the normal benefits apply. Search out other potential issues and probe with the right questions.

Other than financial risks your potential clients might be concerned about viability, quality, or timeliness risks to name but a few.

 

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