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
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.