Question: Hi Mr. Stiving, I am really honoured to be connected with you. I daily go through your thoughts and they are impressive. I need your intelligent brain to know as a pricing person how would you react to sales under pressure asking to reduce price every moment. It’s typical sales people always do it. Thank you Regards, Vinay
Answer: First, I love the complements. Thank you!
Discounts
Salespeople always ask for discounts or lower prices because their buyers always ask for lower prices. They (sales) believe that it would be easier to sell at a lower price, and it might be a little. But no matter what price they lead with, buyers will still ask for a lower price.
As pricing, marketing, and product people, we must focus on value. We must create products that have value. We must communicate to our market that our products are valuable. And the last straw is capturing much of that value through setting the right price and helping sales learn to sell value.
Value
As a pricing person, the biggest problem I see in companies is NOBODY understands value. If you don’t really know what value it, then how do you create, communicate and capture it?
What is value? The simple answer is value is what the buyer is willing to pay. The more complex answer is figuring out how buyers make that decision. That’s for another, longer post.
“What do we do with sales?”
Back to your question, what do we do with sales? We give them a product portfolio that has value, we give them the tools to sell value, we teach them how to help buyers discover the value of our products. We give them compensation plans that encourage them to sell at higher prices.
I often say when salespeople ask for discounts it’s because we haven’t given them the tools, knowledge and confidence they need to win at our prices.
Good luck!
**Note: Mark Stiving has an active LinkedIn community, where he participates in conversations and answers questions. Each week, he creates a blog post for the top question. If you have a question, head over to LinkedIn to communicate directly with Mark.
