The other day I was talking to the CEO of a small medical devices firm. During the conversation, she let slip that she hadn’t raised her prices in 15 years! I almost had to pick my jaw up off the floor. After I got over my initial shock, I asked some questions…chiefly three:
Topics: Setting Price
Recently I was talking with a few business partners about the latest business trends we see with clients. One hot topic is transformation! On any given day, another organization is appointing a new transformation leader, plotting a new strategy for organic growth, and talking about increasing profitability. On the surface, it makes sense. Successful businesses should consistently focus on revenue growth and margin improvement...right? But where is the best place to start?
One of the top challenges sales leaders share is their Sellers' hesitancy to engage in early, prospecting conversations with customers. It is common for us to hear sales leaders lament that their "Sellers are great once the product discussion starts, but they will not engage in open-ended conversations where they don’t know the answers. They assume they must always play the role of the expert.”
At Holden Advisors, it’s fun to hear stories from our workshop participants about how they negotiated an extra $200K into their deal or took what appeared to be lost cause and turned it into a $5MM opportunity that’s on the cusp of closing. (Both true stories.)
Imagine this: You’re selling your company’s best product. You’ve successfully navigated the gatekeeper to speak with your target buyer (the person who will actually use your product) and have shared enough of a compelling message that they’re willing to engage with you. You figured out that they have the budget to buy your product and have proposed a solution you know will help your buyer achieve their goals. Everything is progressing wonderfully and then your primary point of contact goes…silent.
For any salesperson, it’s important to understand why your customers keep coming back:
- Is it because you’re a better deal than your competitors?
- Is it the simplicity of your product offering?
- Is your product suite so specialized, there is no equal?
- Is it too complicated to uninstall your offering?
- Does your customer simply respect their relationship with you, and your product continues to deliver value for their organization?
I recently read an article about new pricing models in the digital era. A few of the key pricing models mentioned included tiered offerings, fixed fees, and subscriptions. I’m sorry to say, these pricing models are not new. However, the nuance they illustrated around metrics is worth noting because, thanks to advances in technology, new metrics have become available that allow companies to measure engagement in ways that were not possible 10 years ago, resulting in metrics that better align with customer value.
We see it often, companies build extensive product portfolios over time, ultimately paralyzing the organization with maintenance activities, instead of focusing on the strategic and tactical elements that deliver value to their customers. This is often referred to as product proliferation. Some causes include: