The first time the champion asks about price, it isn’t about price

In most enterprise deals I’ve been a part of there are two conversations about price. One can easily slow or lose the sale by failing to distinguish the conversations.

The first time you are likely to get asked about price is relatively early on in the deal, usually after the deal champion has gotten excited and interested about the deal. It often sounds like, “So how much is this going to cost?” And usually there is a degree of rapport with the champion that was just established so that you as the seller want to be direct. The problem is that the champion isn’t actually asking you what the price is.

The champion is usually really asking is: “Are you a qualified vendor and which procurement process do I need to use?” They aren’t actually looking for a price, though that’s great if you want to give it to them. If you tell them <$100 they might just put it on the credit card right then and there; and if you tell them more than the divisional budget, they are going to walk. Ideally if you can guide them to understand that you’ll be in their budget, and whether they have to use their light or heavy approval approval process, they are likely to be accepting of doing the work to procure your solution at some semblance of a reasonable price for you as the vendor.

If you can answer the question by giving the champion enough information to put you in the right process you don’t actually have to answer the question of “how much does this cost.” In fact, a vague answer here can help advance a good deal and help the buyer by pivoting to the scoping conversation and the levers to pull to create maximum value for the buyer. If you can get the buyer to have that conversation you have an excellent shot at getting a perfectly scoped deal in front of the executive sponsor and procurement.

The second time (although it may come up a few times in a fashion similar to the first time) that you will discuss price, it is about price. Hopefully, the second time is after you have executive sign-off that the solution you are presenting is correctly scoped, needed now, you are the preferred vendor, the ROI of your solution over alternatives including doing nothing is quantifiable with proprietary data of the buyer, and in the budget that you’ve learned. If you’ve gotten to this point with the buyer, it is as good a position as you’ll ever be in to present lucrative pricing as a win / win partnership and solid investment for the buyer–ideally because it is true. And if you have to discount, ideally it is because it actually is in your interest as the seller.

Good luck bringing your innovation to the world!