By Don Mulhern
We’ve all heard the adages: “The customer is always right”; “Sell the way customers want to buy”, etc. These are helpful in a certain context. Unfortunately too many of us in sales take them too literally and apply them universally to all our interactions with customers.
We are often misguided because we don’t understand the difference between demands and needs. Understanding the difference is important, especially in sales. Yet so many sales people seem to not even consider the distinction. What’s the difference? Let’s start with definitions of each excerpted from Webster’s:
* Demand (noun): a forceful statement in which you say that something must be done or given to you
* Need (noun): something that a person must have : something that is needed in order to live or succeed or be happy
While it may seem subtle, there is a significant difference. Prospects and customers demand things all the time. If we simply try to give them what they ask for in the name of being “responsive” or “a customer advocate” we can put ourselves in a bad position. Responsiveness is great. But it does not mean capitulation! Now, I’m not saying we should be stubborn or confrontational. But we should artfully probe to uncover the real need behind the demand. Sometimes we may find that there is a better way to address the need than what the prospect is demanding.
What makes it tricky is they may even use the term “need “in their demand statement. And these demands are voiced throughout the buying/selling cycle. For example:
* Upon initial engagement they may think they’ve accurately diagnosed their situation and tell us they need something. In these cases they may have self-diagnosed or worse yet, one of our competitors may have planted the notion of what they “need”. These are the ones who are the proverbial “57%” through the buying process. [In my business, this sometimes manifests itself in the statement “We need sales training”.]
It’s easy to fall into the trap of thinking “great, this is a qualified prospect because they already know what they need and I have a product or service that fits”. But unless we’re in a transactional sales environment, this is often a mistake because what they think or saythey need (i.e. demand) may not actually be what they really need. Or it may only be a part of a larger need. Simply taking their demand at face value and eagerly responding( often along with our competitors who’ve been invited in) misses a big opportunity to add value and differentiate ourselves. Rather, our job at this point is to tactfully ask why; how they arrived at the conclusion that they need “xyz”.
This does a couple of things for us. First, it provides us with insight and context. We have an opportunity to rigorously qualify the prospect; to uncover the real needs behind the demand, and to collaborate with the prospect to understand the urgency of those needs and the cost of inaction. We can then shift the conversation toward these root causes that spurred the initial demand. Prospects usually appreciate this new perspective. Second, this approach sets us apart from our competitors who are simply responding to the demand.
* A bit later in the engagement (sometimes quickly) the prospect may ask something like “How much does it cost?” or “I need you to provide me with a quote (or proposal)”. Eager to move the sales cycle along, we might rush ahead and provide the quote even though we haven’t fully qualified the opportunity. Hey, they must be really interested right? Well maybe. Or they might just be exploring options and are not really in buying mode. These aren’t necessarily bad situations. We might want to continue the engagement by providing insights, developing relationships, and helping to shape their buying vision. But they aren’t at the stage where we should spend the time and effort to create a firm quote or proposal. Doing so only has the adverse effects of prematurely planting a configuration and price in their mind that will probably need to be undone/redone after conducting diligence around their precise requirements. A worse situation is where we are simply “column fodder” to leverage our price against the prospect’s preferred supplier, which is a complete waste of time and often ends up providing the competitor with insight into our design approach and pricing strategy (helping them to more effectively compete with us in the future!). My business partner likes to call this “teaching them how to beat us”.
* Further along, after the prospect has engaged in earnest discussion with us about moving forward, we get presented with demands as they attempt to negotiate. “We need a better price” or “we must have this contract term” are typical examples. Here again, it is important to (tactfully) ask why. What is driving that demand? Is there another way of addressing the root issue or concern? Might we be able to show them a better approach, perhaps a win/win instead of a pure concession? Too many times we simply react by providing a discount or agree to unfavorable terms to win the deal. This not only hurts our margins and adds risk for our company, it also sets an undesirable precedent for future deals.
The more astute we are at recognizing demands for what they are understanding that they may not represent actual needs, the more effective we become at all stages of the selling/buying cycle. This means we shouldn’t universally accept the old adages like “the customer is always right”. Sometimes they are; they’ve nailed it. But many times they aren’t even though they might think they are. In these cases we need to constructively challenge the customer, to probe to get underneath the demands and find the real needs (things they “must have”…”in order to live or succeed”). We owe it to our prospects/customers and to ourselves.
And what if the prospect refuses to engage in this type of dialog and continues with demands and even ultimatums? We have a choice. We can go along, half-blind, in the name of being “responsive” and hope we win (we may sometimes, although often at reduced prices and/or increased risk to us). Or we can decide to walk away and spend more time with prospects willing to engage in constructive dialog, where we can really make a difference by addressing truly critical needs and not just demands. I like my chances with the latter.