Pricing Teeter Totter
Have you heard this from sales? "Our prices are too high and we can't win business. Customers won't pay that much." How about this from the product lines? "We design in a ton of value. Sales just gives it all away ... Salespeople don't know how to sell." As pricing professionals we are caught in the middle. Product lines pushing for higher prices, salespeople pushing for lower. What do we do? It turns out that the answer isn't as hard as you might imagine. Both groups want what is best for the company, but they have different perceptions about the truth. Our job is to help them get to the truth. It's all about processes and data. Product lines: Tell them you empathize. You want to train the salesforce on how to sell value, on how to win at higher prices. However you need tools to help the field. You need documentation on how our products compare to our competition. You need both the positive and the negative so the field doesn't get surprised, but we're sure they can succeed given this information. After all, our customers won't pay for our value if they don't know about it. Sales: Tell them you understand. You are watching what prices we win new business at. You are talking to the product lines about maintaining accurate price lists. The last thing a salesperson wants is to be embarrassed, to show up at a customer and quote a price that's 3 times higher than the competition. Yet be sure to share stories about the best salespeople, the ones who win at the highest prices. With sales you must empathize, analyze data, and let them know you are working with the product lines to maintain accurate pricing. We (pricing professionals) are the fulcrum of the business. Product lines want higher prices. Sales wants lower prices. Our job is to convince them both we want optimal pricing. That only comes from real effort and real analysis. Good luck Mark Stiving, Ph.D. – Pricing Expert, Speaker, Author Photo by navonod Sign up for the Pricing Perspective to get a monthly recap of these blogs plus more insights on pricing.
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