Are you sick of hearing about the need to protect your premium high value offerings and stop discounting? Well, you may be sick of hearing it, but it's true.
Generally speaking, as a seller to a seller, we know that big sales opportunities are both a blessing and a curse. While they offer the opportunity for “quota busting” years, they also carry a heavy spotlight and the pressure that comes along with it. This pressure churns our emotions, generating angst in even the most tenured sales pros. How do you deal with the stress?
When Holden Advisors started almost 2 decades ago, our practice was rooted in B2B pricing. Reed Holden, our founder, co-authored the book that became the industry’s standard academic and practical pricing reference.
The business world is full of great ideas that don’t get adopted. Some require too many resources, some are too expensive, and others don’t fit within an organization’s strategy. Then there are the millions and millions of ideas that fit within a budget, aren’t too hard to execute and perfectly align with an organization’s goals … and still aren’t adopted. Why not? People fear change.
A recent article on pricing power referenced the example of Martin Shkreli’s Turing Pharmaceutical decision to raise the price of Daraprim by 5000%. Shkreli famously purchased the rights to an older off-patent drug used to treat infection in AIDS patients and dramatically raised the price – a demonstration of pricing power. The following controversy caught up with Shkreli, who gloated that he didn’t raise the price enough. Investigators couldn’t jail him for the Daraprim price, but digging found other dirt and he was sentenced to seven years for fraud related to his former hedge fund.
The following article is my reaction to a blog from a friend, Steve Haggett at Iron Mountain. He responded to an article from our Patrick McCullough about some of the pricing abuses in the pharmaceutical industry.
Do you think your sales team effectively sells the value that you provide to your customers? And how would you measure that, anyway?
It was a tough conversation but in the end, it was simple and quite insightful. It started with a client pushing back on price. We responded that it was going to cost us a lot to get the job done. She came back saying it was a lot of money to support only a few people, especially when they had more to train. We realized that we could run the engagement with more people in the same session…same cost for us and better outcomes for the client. The client was happy and placed the order.
How many blog posts have you read that start with something like, “As a 20-year sales veteran, I’ve experienced …blah…blah…blah”? It’s amusing how sellers use tenure as a crutch for complacency. It sounds reasonable though, right? Why shouldn’t my performance speak for itself?
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