Revenues Reimagined with Pricing
Everyone at Boost Profits thinks about sales – a lot. I write about how to increase sales – a lot. Our mission is to help sales organizations increase sales – a lot. And, if you are familiar with our work and/or read my blog, you probably know this and know something of how we do it.
We help with skillsets. We help with mindsets. We help with sales hiring. We help with sales processes. And most of our work is focused on increasing sales.
But the fact of the matter is that a quicker, easier way to increase revenue is through pricing.
Not Without the Basics
Your team must still execute the sales basics or they won’t sell much. If they can’t conduct a great discovery conversation that helps the prospect discuss their problems, then it doesn’t matter what you charge for your products and services. If your team can’t gain the trust and respect of the client, then forget it. You won’t have any sales upon which to maximize the price.
So, let’s be clear. Your team must be able to first follow a sales process that supports efficiency in qualifying and closing. It should look something like this:
- Conduct discovery meetings that uncover if your organization can help.
- Learn the compelling reasons that the customer might do something…and learn how compelling those reasons are.
- Quantify the impact to the customer for failing to act, or in choosing an inferior option.
- Determine all stakeholders that will be involved in the decision-making process and how these stakeholders determine what the right option is.
Once you are certain that the team is proficient at this process then you should explore how they are handling price objections and negotiations.
Stumbling on Price
Frequently, salespeople do a great job of the discovery, the value creation, the trust-building, but then it all fizzles when they are faced with pushback regarding price. They may have the urge to discount out of fear that they will lose the opportunity. They come to you to seek approval to lower the price. And, what happens is that they wipe away all the good mojo associated with an excellent sales process.
When to Get a Price Premium
If your team is trained well and can execute great discovery conversations. And if your products or services are top-notch, then don’t fritter it away by caving to a perceived need to discount. As a matter of fact, the better your products and services, the more you should consider price increases.
And even if your products and services are in alignment with competitors (in other words, there’s no distinct competitive product-related advantage), if your team is able to expertly understand the customer through thorough questioning of the elements that cause the customer stress, pain, discomfort, uncertainty or fear, then you may still want to consider price bumps. The reason being is that your team should be able to gain the trust and confidence of the customer. And if they can do that, then they will be worth a premium in the customer’s mind (assuming your offerings will solve their problem).
Sadly though, 60% of salespeople are uncomfortable discussing money. This means that even some of the salespeople on your team who are excellent at discovery conversations may STILL feel uncomfortable when it comes to getting paid for the value delivered. They may crumble when confronted with price objections.
We’ve created a Simple Profitability Plan that illustrates the impact of both improving closing ratios (which is largely due to a repeatable and efficient sales conversation process) AND the impact of price increases and decreases. Use it to see the effect on revenues and profit for yourself.
If you are sure your team is following a repeatable, relevant sales conversation process you should consider the massive impact that price has on your profitability. But remember you will have to address both the skills associated with getting paid for the value delivered and the mindset that frequently prohibits salespeople from being able to effectively deal with money and price discussions. If these seem daunting, don’t worry as they are both something with which we can easily assist. Just reach out.