SellingBrew

Insights & Tips

Already a subscriber? Login

Become a subscriber and unlock an information arsenal focused on making your sales operation more effective.

5 Ways Sales Can Stop Losing the Pricing Game

A couple of months ago, a leading sales technology company asked us to share some of our observations and research with their audience. The event was a lot of fun and we were pleased to see so many of our subscribers also in attendance!

In the hour-long session, we discussed a number of strategies and tactics that leading sales operations are employing to reduce over-discounting and margin erosion in the field, including:

  • Modifying incentive plans to reward salespeople for profitable pricing decisions as well as revenue generation.
  • Providing training regimes squarely focused on imparting the strategies and tactics of effective negotiation.
  • Implementing price optimization technologies to show salespeople what customers are really willing to pay.
  • Developing more compelling and robust value cases to proactively influence prospects’ pricing perceptions.
  • Refining targeting definitions to focus on prospects who are inherently less price sensitive and more profitable.

So, why is this topic so important? Why are leading sales operations focusing more attention on shoring-up their pricing and discounting? What do they see that other teams might be missing?

Simply put, price concessions have a disproportionate negative impact on profits. Clearly, a 10% discount on a transaction affects revenues to the tune of 10%. But depending on the starting margin levels, that 10% discount could be slashing transaction profits by 20, 30, or even 50%!

pricingleverageexample

Turning it around, reducing price concessions has a disproportionate positive impact on profits. Again, depending on the starting margins, a sales operation that reduces overall discount levels even just a little—say, from 10% to 8%—could boost profit contribution by as much as 20%.

Leading sales operations recognize that pricing is an extremely powerful profit lever, where relatively small moves can have magnified impacts. And as a result, they’re taking proactive steps to ensure that those magnified impacts aren’t to the downside.

Get Immediate Access To Everything In The SellingBrew Playbook

Related Resources

  • Fostering Productive Collaboration

    In this recorded session, we discuss how to identify and influence the groups that contribute most to our sales performance and explore the 8 key ingredients for effective cross-functional collaboration.

    View This Webinar
  • 17 Insights That Improve Close-Rates & Margins

    The more your team knows about how your prospects perceive the marketplace, the better the chances are for success. This guide provides the key prospect insights that can improve close-rates, margins, and long-term customer values.

    View This Guide
  • Managing Successful Sales Ops Projects

    Bringing new Sales Ops initiatives to fruition in established companies is rarely a cakewalk. So, how do we manage our projects to maximize our odds of success and minimize the chance of failure?

    View This Webinar
  • Getting Your Salespeople to Price Better

    Chances are, the behavior of your salespeople will ultimately determine whether pricing strategies are effective or not. In this on-demand training seminar, learn proven approaches and strategies for getting your sales team to price and discount far more effectively.

    View This Webinar