I had a fascinating conversation with a potential customer this week. He essentially said, “We care about pricing. We have taken a lot of pricing courses. We know about value-based pricing and price segmentation. But nothing changes because the salespeople don’t change. We need our salespeople to sell the value of our products, not just the features.”
He made many other comments that were also brilliant, but let’s focus on this one. Pricing is a team sport. It doesn’t matter how well you set your prices or your pricing strategy. If your salespeople can’t execute the strategy, your average selling price doesn’t increase. This is the last mile of pricing.
Hopefully, the team that set the prices used Value-Based Pricing, meaning they focused on how much value buyers should expect to receive as they set the prices. So why don’t they help the salespeople understand value?
The pricing team should be examining and building pricing strategies around relatively stable contexts. For example, they may set different pricing by industry or geography.
But, the sales team is in the unique position to recognize and leverage the dynamic contexts that affect an individual buyer’s willingness to pay. They need to know how to look for more value, how to identify buyers with high WTP. Most importantly, they need to communicate that value to the buyer so they can win at higher prices.
How are you measuring the success of your pricing? If it’s by price increases, that’s only internal. If it’s by price increases achieved, that’s brilliant. But you can’t achieve price increases unless the sales team is able to win at those prices. Pricing is a team sport. Helping sales is part of the job. Let us know if you would like some help. It’s what we do.
Now, go make an impact!
Tags: pricing, pricing foundations, pricing metrics, pricing skills, pricing value, salespeople, value, value-based pricing
