Corporate Buyers Can Be Driven By Emotion, Too
You might assume, if you’re a consultant or some other professional services provider looking to do business with a major corporation, that that corporate buyers make decisions based on “logic,” not emotion. You might assume that the decision always comes down to price. If that’s what you assume, then listen to this story behind the phrase “nobody ever got fired for hiring IBM.”
The Price and Value Journey is presented by John Ray and produced by the North Fulton studio of Business RadioX®.
TRANSCRIPT
John Ray: [00:00:00] Hello. I’m John Ray on The Price and Value Journey. Years ago, there were two major mainframe computer manufacturers. Those were in the days when mainframe computers were a big deal. IBM and Amdahl were the two players in the market. Of course, IBM was the market leader by far and away. And Amdahl was the upstart competitor.
John Ray: [00:00:28] Well, in those days there was a mantra among chief information officers of major companies that said, No one ever got fired for hiring IBM. You see, even if as a CIO, you believe that an Amdahl mainframe offered faster performance at a lower cost than the IBM equivalent. As a CIO, you were reluctant to propose a multimillion dollar corporate commitment to what was regarded as the upstart.
John Ray: [00:01:00] A choice for IBM was the safe, understandable decision. If you advocated Amdahl, on the other hand, your own decision making ability might be questioned. If something went seriously wrong, that Amdahl decision you’d promoted might necessitate an updated resume.
John Ray: [00:01:22] Decisions in favor of Big Blue were routinely made in corporate America in those days, even though IBM was invariably the more expensive choice. Why then, professional services provider, would you assume that enterprise buyers of your services are “more logical” than individuals and that with big companies it’s all about “price”?
John Ray: [00:01:48] I’ve heard this one more than a few times from professional services providers, like consultants, who work with major corporations. Corporate buying decisions, folks, are no different in this regard than choices of individuals. They are driven by both tangible and intangible considerations. In the IBM/Amdahl case, the intangibles of fear and risk avoidance routinely overcame “logical” price considerations.
John Ray: [00:02:22] For you as a professional services provider, it’s not a question of right or wrong or that big companies are dumb. Understand that uncertainty and fear are powerful emotions, which are invariably a factor in every buying decision, whether individual or corporate.
John Ray: [00:02:42] The question you need to answer objectively is whether you’re a safe choice or a risky choice. Is what you offer that buyer one that’s easier to justify if something goes wrong later? Is there a smaller downside? Do you help that buyer avoid or minimize risk? If so, you’re offering value. And that value, as IBM routinely proved in the salad days of mainframes, is worth a premium price.
John Ray: [00:03:16] I’m John Ray on The Price and Value Journey. Past episodes of this series can be found at pricevaluejourney.com. And feel free to email me if you’d like, john@johnray.co. Thank you for joining me.
About The Price and Value Journey
The title of this show describes the journey all professional services providers are on: building a services practice by seeking to convince the world of the value we offer, helping clients achieve the outcomes they desire and trying to do all that at pricing which reflects the value we deliver.
If you feel like you’re working too hard for too little money in your solo or small firm practice, this show is for you. Even if you’re reasonably happy with your practice, you’ll hear ways to improve both your bottom line as well as the mindset you bring to your business.
The show is produced by the North Fulton studio of Business RadioX® and can be found on all the major podcast apps. The complete show archive is here.
John Ray, Host of The Price and Value Journey
John Ray is the host of The Price and Value Journey.
John owns Ray Business Advisors, a business advisory practice. John’s services include advising solopreneur and small professional services firms on their pricing. John is passionate about the power of pricing for business owners, as changing pricing is the fastest way to change the profitability of a business. His clients are professionals who are selling their “grey matter,” such as attorneys, CPAs, accountants and bookkeepers, consultants, marketing professionals, and other professional services practitioners.
In his other business, John is a Studio Owner, Producer, and Show Host with Business RadioX®, and works with business owners who want to do their own podcast. As a veteran B2B services provider, John’s special sauce is coaching B2B professionals to use a podcast to build relationships in a non-salesy way which translate into revenue.
John is the host of North Fulton Business Radio, Minneapolis-St. Paul Business Radio, Alpharetta Tech Talk, and Business Leaders Radio. house shows which feature a wide range of business leaders and companies. John has hosted and/or produced over 1,500 podcast episodes.
