Creative selling isn't just for new accounts. A good creative seller will base the renewal proposal on a fresh idea for the long-term customer as well. Since you know their business intimately now, your ideas for them should be real barn-burners.
Idea power works on renewals the same way it works on new prospects. It more firmly establishes you as a resourceful ally of the customer. It separates you from the competition. It moves you and your proposal farther up the decision-making chain. And there’s that key advantage of idea selling, which is its focus on value rather than price.
A typical contract renewal usually starts with you and/or your sales manager deciding how much more to ask the account to spend. That amount generally is determined by the budgeted revenue increase your company has imposed on your sales manager and has nothing to do with the customers or their needs.
So the two of you look at what the customer spent last year, what prices they paid for what inventory or services, and you put together a proposal for the same thing with an additional item or two plus some unit price increases. Sound familiar?
When you pitch this insightful piece of work to the customer, Mr. Big’s going to consider it with two things in mind:
1. “Since this is the same thing I bought last year, am I satisfied enough with it to buy it again?
2. And if I buy it again, can I get a lower price?”
Then he’ll pull out the proposal which your competition has given him and compare the prices. Since they’ve had a year to study what Mr. Big bought from you, they’ve undoubtedly offered their version of it at a lower price. Even if they haven’t, Mr. Big is going to tell you that they have.
Being the saint that he is, Mr. Big will also inform you that he wasn’t entirely happy with what you sold him last year and has to have a better price this year to justify buying the same thing again. And since you can’t prove either point otherwise, you have to negotiate the renewal on price.
But what if you had followed the Creative Selling System to set up your renewal pitch? You’d be presenting a new idea to Mr. Big rather than the same old thing. And since your idea is based on the intimate understanding of his needs you have gathered during the last year of servicing the account, it should be right on Mr. Big’s target. Can he compare your new proposal with the competition’s? They’ve come in with last year’s model while you’ve presented a completely redesigned, up-to-date, forward-looking alternative. Which looks better?
How about comparing the new proposal with the old contract? If he says he wasn’t satisfied with the old deal, he’s playing right into your hands. Once again, what you are offering isn’t the old deal—it’s something new. He can’t compare prices—it’s apples to kumquats.
Idea power is awesome.
Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for business owners and managers in the Dynamic Manager's Guides and Handbooks, a series of how-to books about marketing and advertising, sales techniques, and management strategy.