> The counter approach is: - Make complete information available as transparently as possible and don't gate it. - Be forthcoming about weaknesses. Don't force prospects and customers to find them. - Ensure that when a prospect or customer does want to talk to someone, they immediately reach someone who can handle the problem or answer the question (no need for escalations.) - Never have an AI agent call someone unless the customer specifically requests that and be sure that all AI agents immediately disclose that they are AI. - Offer flexible e-mail list subscription options (monthly, quarterly, annually, only release notes, etc.) - If the product is not a fit, try to offer something useful anyway such as a suggestion of another product that might be a better match for their needs.
From the perspective of designing a sales org to do this it is, roughly, a sales-engineer focused sales organization with the sales engineers on a minimal commission plan (i.e., a pooled 80% base/20% commission plan instead of something like an individual 70/30 plan.)
I never saw it in practice, but it would probably have something like a 2:1 ratio of sales engineers to account managers. On the plus side, sales engineers are less costly to employ than account managers. On the down side, this will almost certainly result in lower revenue.
> Value based pricing is one of the reasons why a lot of companies end up in these situations. Rather than setting a standard price, the company does a detailed investigation of the customer to try to find out how much value they will gain from using the product and then they set the price based on that determination. Although it maximizes revenue in theory, it is slow and invasive.
In my experience (working in tech sales for a few large manufacturers,) this is almost never a routine practice of the sales team. It is sometimes discussed in sales training, and very, very occasionally put into practice, but the Achilles heel is your last comment: it is slow and invasive. Sales people are a diverse group, but they are united by the belief that time kills all deals.
Product teams do large scale market segmentation and price sensitivity studies -- that's where you get all of the packaging options. Sales teams? If they have a large existing customer, that customer will already have a standard discount level. That's the starting point for any given negotiation. For new customers or smaller customers, the sales team will try to sell at the 'standard' price, where by 'standard', I mean the prevailing discount level in their region. Variables that will ultimately cause the price paid to change: fiscal year-end/quarter-end, competition, bundling, "incentives" / customer "budget." I put those roughly in terms of how powerful a lever they are to move the price, on average.
Fiscal year-end/quarter-end. One challenge with trying to root out traditional sales/purchasing behavior is that customers are trained to reinforce the behavior. While it doesn't always work (a sales rep might be significantly under or over goal and might want a deal to slip into the next quarter/year,) if a customer can force a deal to get done around the end of the vendor's fiscal periods, they have significant leverage to negotiate a lower price if the vendor believes the deal might slip.
Competition - this one is pretty obvious, but adding a competitor to your purchase evaluation and letting the vendor you want to buy from know that you are seriously considering their competitor will likely result in a lower price. Bonus points for the purchasing team telling the vendor their engineers like the competitor's product better, but the purchasing team really wants to buy from you because they love you so much. Double bonus points for telling both vendors that.
Bundling -- if a manufacturer has multiple products, they often will voluntarily increase their discount level to induce the customer to buy a product 'suite'. The sales reps are often under immense pressure to sell the newer and flakier products on their price lists, and this is usually the only way it gets done. On the plus side, the customer gets more product for the same price. On the down side, the extra products included often aren't worth using, and come renewal time, the true total cost of ownership becomes apparent.
"Incentives" / "customer budget" - these are both, typically, BS in that the vendor doesn't usually have a magic "incentive" to offer a one-time discount. The sales rep just got (or thinks they can get) approval for a lower price. Similarly, while customers most certainly do have budgets, they often lie and say they can't buy x because it exceeds their budget, when their internal sales people (the purchasing team) just wants a lower price. I refer to the purchasing team as "internal sales people" because they often-times have a commission incentive just like the vendor sales rep: it isn't uncommon for them to have a personal, individual bonus tied to driving vendor contracts down in price. In some cases, it is a direct commission -- i.e., the purchasing agent (or sometimes budget owner) gets 10% of any monies saved.
I wish you the best of luck, but other than taking people completely out of the equation, I think it is really hard to eliminate this behavior in practice because 1) it is so thoroughly ingrained amongst both vendors and customers and 2) it works.