Ask most tech companies why customers choose them and the word you’ll hear most often is ‘value’. Ask why they lose deals and, more often than not, the answer switches to ‘price’. Our latest research found that a large share of leaders hold both beliefs at the same time, which I think says something quite important about the way we explain wins and losses to ourselves.

Having it both ways

We commissioned Lightspeed Research (Kantar) to survey 163 B2B technology decision-makers across marketing, sales and product in Australia, the UK and the US. 88% told us customers choose them for the value they offer. At the same time, 52% said competitors win customers on price, and 47% agreed with both statements. Only 9% said price is what actually sets them apart.

So close to half of tech leaders believe that when they win it’s on value, and when they lose it’s on price. It’s a comfortable story to tell at a pipeline review, and I’d be very surprised if it were the whole truth.

The price paradox

Wins are credited to value. Losses are blamed on price.

88%say customers choose them for their value

52%say competitors win customers on price

47%agree with both

Only 9% say price is what actually sets them apart.

Survey of 163 B2B tech leaders, AU/UK/US
Lightspeed Research (Kantar)

The easiest answer in the room

Price is the reason everyone can live with after a lost deal. The buyer can give it without having to explain anything awkward, the seller can record it without admitting the pitch didn’t land, and the CRM helpfully has a drop-down for it.

In my experience, though, ‘too expensive’ is usually shorthand for something else. Sometimes the buyer simply didn’t see enough difference to justify paying more. Sometimes they weren’t convinced you’d deliver, and the cheaper option felt like the safer one to get wrong. Quite often somebody else in the buying group had a relationship, a preference or a mandate you never knew about, and occasionally the timing was off and price was the polite way of saying ‘not now’. Each of those calls for a very different response, and only one of them is fixed by a discount.

What the paradox costs

If your organisation believes it wins on value and loses on price, two habits tend to set in. Marketing keeps talking about value in broad terms, because that appears to be working, while sales keeps discounting to close, because that appears to be the problem. Over time both habits nudge you towards the middle of the market, where your messaging starts to sound like everyone else’s and your margins start to look like theirs too.

Getting to the real reason

A better drop-down list won’t solve this. What helps is talking to the people who chose someone else, and doing it properly. I’d suggest waiting around six weeks after the decision, by which point buyers tend to be far more candid because the deal is done and the relationship pressure has eased. Ask them to walk you through how they made the call, which will get you a lot further than asking why they didn’t pick you. Then compare what they tell you with what actually happened – when they shortlisted, who joined late, what they asked to see that you never showed them – and look for patterns across several deals rather than the story of any single loss.

Do that with eight or ten recent losses and a handful of wins, and the ‘price’ label usually breaks apart into two or three far more useful reasons.

About the research: an online survey of 163 decision-makers in marketing, sales and product at B2B technology companies with annual revenue of $20m or more, in Australia, the UK and the US. Fieldwork by Lightspeed Research (Kantar).