Impact Pricing Podcast

#481: Pricing Table Topics: 2 of Clubs – Salespeople with Authority to Discount

This one is the 2 of Clubs from the Selling Value card deck. 

Salespeople are going to use every single tool they have available to them. Absolutely, they’re going to use value selling if we’ve taught them how, and they understand, and they’re doing a great job. But even if they’re using value selling, it’s very easy for them to offer discounts. And there’s this attitude or belief that offering discounts helps close a deal faster.

And maybe it does. Maybe when a customer or a buyer asks you for a discount, it takes longer to say no and explain why. And we could have just said yes and close the deal and we’re done.

“We want to make sure they’re [salespeople] incentivized to close deals quickly at the highest possible price.”

– Mark Stiving

Wouldn’t that be great if it worked that way? But here’s the key, every dollar that we discount comes straight off of our profit.

We still have to cover all of our costs, and so our margin just got shrunk by more than our revenue did on a percentage basis. So, if we want our salespeople to not rely on price, we have to make it painful for salespeople to offer discounts. 

How do you do that? Create a compensation plan that as they give bigger discounts, the percentage or the size of their deal goes down faster than the revenue goes down because salespeople are incentivized to close deals as fast as possible. And we want to make sure they’re incentivized to close deals quickly at the highest possible price.

We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script. If you want to get better at speaking about pricing and value, grab a deck of our cards, pick a card, read the saying, and then talk for one to two minutes about what that card says. You’ll become a better speaker and expert.

If you have any questions or feedback, please email me, [email protected]

Now, go make an impact.

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Tags: Accelerate Your Subscription Business, ask a pricing expert, pricing metrics, pricing strategy

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