Shaping the Buying Decision’s Reward for Competitive Superiority

“When considering or approving a particular supplier, executives base their view on how a solution will affect the fundamentals of the business: revenue, profit, market share, customer satisfaction, strategic investments, earnings per share and so on”

Holden/Kubacki, The New Power Base Selling

Reward is one of nine Buying Decision Influences. Together with Risk it makes up the business case an Economic Buyer must provide to justify their procurement decision.

For this, Reward must have a measurable impact on Key Performance Indicators (KPIs) the Economic Buyer monitors success by. Ultimately, KPIs relate to revenues, costs, or compliance and therefore this is where a buying decision must make an impact on.

Key to success for a vendor is to link their offering to a KPI impact highly relevant for the Economic Buyer. Ideally, they can link a Unique Selling Proposition (USP) to a desired Reward as this makes the Value Proposition unassailable for the competition. As a consequence, sellers must actively shape the Economic Buyer’s Reward expectation rather than just taking it as a given.

The best way to start this is by initiating the entire buying decision process from scratch. This is the concept of Challenger Sale where the seller “leads with hypotheses of customer needs” based on “their own experience and research” (Dixon and Adamson, The Challenger Sale).

The second best way is what Holden and Kubacki call the “Indirect Strategy”: changing the buying criteria after the buying decision process was already kicked off.

Either way, the seller who can shape the Economic Buyer’s Reward expectation in their favor and link it to a unique capability of their offering will have the best chances of being selected.

Besides the fundamental driver of the Value Proposition, scope and time play an important role and thus must be influenced by the seller as well.

An example for increasing the scope would be a buying decision for one plant where we can demonstrate that implementing our solution in 5 plants will deliver 5 times the benefit at only 3 times the effort due to economies of scale specific to our proposal.

An example for time would be a rollout planned over 3 years where we can demonstrate that with our unique solution the rollout can be completed within just 2 years resulting in superior time to benefit.

So to summarize:

The parameters of Reward a seller must try to influence are:

1. The KPIs the buying decision is expected to have a positive impact on;

2. The scope of the buying decision; and

3. The time to benefit from the customer’s investment.

For additional detail please download the Reward narrative here.