Insights — Sales Strategy — 3 min read
Why Are We Losing Deals on Price?
Losing on price is rarely a pricing problem; it is almost always a positioning or process problem.
In short
Losing deals on price usually stems from a failure to differentiate the value proposition or a lack of discount governance. When a buyer cannot distinguish between two solutions, price becomes the only variable. To stop losing to cheaper competitors, businesses must move from selling features to selling outcomes, implement strict pricing controls, and ensure sales teams can justify a premium by addressing total cost of ownership.
When a salesperson says, 'We lost that deal on price,' they are often telling a half-truth. While the competitor's quote may have been lower, the real reason for the loss is usually that the buyer didn't see enough extra value in your proposal to justify the difference.
If your business is constantly being forced into bidding wars, you aren't selling a solution; you are selling a commodity. And in a commodity market, the only thing that matters is the lowest number.
The Commodity Trap: Why Differentiation Fails
In B2B sales, if your proposition sounds exactly like your competitor's, the buyer is behaving rationally by choosing the cheaper option. 'Quality, service, and reliability' are no longer differentiators; they are the minimum requirements for entry.
To escape the trap, you must find a specific, quantifiable pain point that your competitor ignores. This might be a faster implementation time, reduced technical risk, or a unique accreditation that simplifies the buyer's internal compliance.
Discount Governance: Stop the Bleeding
Discounting is a habit that is easy to start and hard to break. Without clear governance, sales teams will use price as a crutch to close deals quickly, eroding margins in the process.
- Set clear 'Walk-Away' points: Define the minimum margin for any deal.
- Tiered Approval: Salespeople can discount up to 5%, Managers to 10%, anything beyond requires the MD.
- Give to Get: Never give a discount without receiving something in return (e.g., faster payment terms, a longer contract, or a case study).
Should Prices Be Public?
There is a growing debate about price transparency in B2B. While 'Price on Application' (POA) allows for bespoke value-based pricing, it can also act as a barrier to entry for modern buyers who want to self-serve information.
A middle ground is often most effective: publish 'starting from' prices or illustrative packages. This qualifies out buyers who will never be able to afford you, while leaving room for the value-based negotiation that complex B2B deals require.
Selling Value, Not Features
Value is not what you think your product is worth; it is the financial impact your product has on the customer's business. If you cannot quantify that impact, you cannot defend your price.
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