Why(and How) the sellers should know the key phrases or words (like TCO) used by their prospects in buying decisions

An on field Experience –

One of our sales friends from a startup recalled an incident that happened with them at Microsoft, which was a high value prospect for them.They were pitching a solution that eases the employee queuing during the meal hours by enabling a remote ordering system which was expected to save employee productive hours and enhance their cafeteria experience. 

During the commercials part of the discussion, the CFO of Microsoft asked them, “What is the TCO(Total Cost of Ownership) to have my startup friend’s solution implemented?

At first, my sales friend stumbled as to what the prospect was asking. It was more confusing to hear the word ownership from the prospect. However, being an experienced sales person, he dared to ask the CFO what the phrase TCO meant for them. The prospect didn’t explain much, leaving the sales friend with no option except to say that he would share a proposal that explains the information the prospect is looking for.

Post call Analysis –

Later, the sales friend browsed for the term only to realise that he already explained the details factored in TCO but not exactly used the word TCO during presentation

Now imagine, what if my friend knew what exactly TCO was for the Microsoft’s CFO or their buying team and he offered all the details related to the phrase right then and there. My friend and I both are sure that the connection with the buying committee would have been more instant and the startup could have been considered as an expert in delivering deals that add value to customers.

For the seller’s understating, here is what TCO actually means –

• TCO is a financial estimate intended to help buyers and owners determine the direct and indirect costs of a product or service. In some cases it also factors the hidden cost.
• TCO includes the purchase price of a particular asset, plus operating cost over the asset’s life span.
• Companies or individuals consider TCO when they are looking to buy assets and make investments in capital projects.
• Companies use total cost of ownership over the long term as a framework for analyzing business deals. Looking at total cost of ownership is a way of taking a more holistic approach that assesses the purchase from a broad perspective. This analysis includes the initial purchase price as well as direct and indirect expenses. 
• More often, large size deals are awarded to sellers based on their TCO than the initial purchase price.

The following picture represents what TCO can be while the components may vary depending on the product or service from the seller.

Sellers(Sales People) might already be answering questions like, what is fixed and variable costs, fixed and maintenance charges or direct and indirect costs . But it is very important to know each and every element factored into these types of costs and get familiarise with key phrases or words that go well within the buyer’s world. This approach helps in – i) Offer a quotation with a customised pricing structure for the product or service  ii) creates an instant connection with the buyer and helps minimise the incoming objections from buyers with more clarity being put on the table.

Some ways to know those key phrases or words –

1. Keep an eye on the job descriptions available in company’s job listings or their employee social profiles. Surprisingly these offer a lot more information than you know about the prospects’ company, culture and internal phrases used for doing Jobs. 
2. Refer their blogs or news events to gather relevant information if any
3. If your prospect is an individual , you could follow their social profiles and enrol into forums that the prospect is part of to know more about what influences their purchase decisions and the key words in their posts or activity
4. Build connections with other (sales people) sellers (could be non-competing)and exchange knowledge about the prospects environment

What are the key words or phrases you came across in your sales journey?  You could share with the community via the comments section.

After all, sharing is not just caring but making our learning stronger in our subconscious minds.

– SG

Happy Selling!