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

  • How to Deal With Churn

    How can we mitigate churn and retain more of the customers, revenues, and profits we've acquired? In this webinar, learn a simple methodology for figuring out what's best in your situation.

    View This Webinar
  • Why Sales Ops Initiatives Fail

    Some sales ops initiatives just don’t work out as planned—they either struggle to produce worthwhile results or they fail outright. So, how do we avoid making the same mistakes that have derailed other initiatives?

    View This Webinar
  • Demonstrating the Value of Sales Operations

    As a relative newcomer on the corporate landscape, Sales Ops often struggles to secure resources and investment. In this on-demand webinar, learn about quantifying and communicating the impact and contribution of your Sales Operations team.

    View This Webinar
  • Exploring Account-Based Marketing and Sales

    While the promise of account-based marketing and sales is certainly compelling, it's important to get beyond the hype and understand what ABM really is and what it can really do for you and your company.

    View This Webinar