How to Have Better Pricing Conversations -
When you conduct price calls What can you do to convince a prospect that the price you offer is correct?
Some would say just tell them what you think your product does better over the competition...
Unfortunately, this can only take you only so far.
Below are two strategies to help improve your pricing calls in an environment that is B2B, where there are both Sales Development Representatives (SDR) and Account Executives (AE) are engaged in the sales process. Let's start...
Value Coaching
Price negotiations will surely fail if there is the need to differentiate between what your prospect and you view as value. It's tempting (and frankly more scalable) to rehash the corporate value propositions and talking points, it's likely to create a gap between you and your potential customer. It's not always about semantics, but it's crucial to truly comprehend your customer's business. It is then possible to design your product or service on the basis of their company.
This is the process I call the value of coaching. It's a tricky concept but begins with understanding and listening instead of doing the talking. There are two ways to begin understanding what your prospects perceive as value:
1) A successful discovery process that is accompanied by a continuous conversation.
Try asking your prospect these questions:
- The sales staff you spoke to employs (TOOL X). Which component of this solution do you use the most with your staff? What are you doing to address this issue in the present? Do you use any tools or are you accountable for the issue?
Consider this quote from Scott Sambucci, Founder of SalesQualia:
"Price is a measure of the value that customers perceive to be worth. If a customer balks at price, they are telling you that you have not yet communicated the perception of value that's needed to justify your expenditure ."
Sales reps are often unable to comprehend their prospect's stack and quote too soon. The questions that probe how the prospect perceives the value of their current stack will help you to find out how your product can fit in it, and to show that you have value to them.
Prior to entering pricing ensure that you know what similar software tools the company uses. You can then alter your research to focus on the value those tools bring to them and address the area between.
Your prospect may view value as the time they are using the product. They'll say their team uses HubSpot for up to 5 hours every each day, making it a great investment for their company.
If your product isn't one that requires the user to be glued to it for the entire day It is important to communicate the user why your product has value even though they won't be using it 24/7.
If you decide to make your pricing too soon, you risk them balking over the price. Learn what they find valuable, and find a way to empathize with the business's challenges and ways they may perceive value (in the sense of warming them up a bit). The best answers in sales can be either no or yes. If there is more than one perception of worth, it's in both your and your prospects best interests to withdraw of the transaction before investing more resources.
2) Make use of tools that can offer insight into how your prospect interacts with your site.
It is difficult to make a good discovery since the majority of prospects are trying to see a demo or reach a price point. There are techniques and tools you can use to discover what is appealing to the prospects.
- Uberflip: create personalized content experiences for your prospects. Their analytics tool provides an insight into what information your visitors are interested in.
The two methods listed above will help to educate your potential customers on value rather than assuming that they are looking for and then selling an unsuitable solution.
Single Option Alternative
Another tip to make efficient calling calls to pricing is to use the psychological concept of single-option aversion.
Behavioural researcher Daniel Mochon posits that customers are more likely to make a purchase when they are presented with several options. Mochon conducted an experiment in which customers were shown two models of DVD players. 32% stated they'd purchase the brand they saw first and 34% selected the second. But when the participants were shown just one DVD player, only 9% or 10 percent (depending the kind of product they saw) said they would purchase the item. It's an 66 percent increase in sales by simply adding a second choice for buyers.
Despite selling B2B SaaS in the past, the brain approaches almost all purchases this way.
I would argue this effect only increases in B2B SaaS settings.
We researched the leading SaaS companies and found that over 65% had a consumer-facing multi-tiered pricing page with a contact-us/enterprise tier without a price.
Most companies will ensure that people who fill out the "contact us' form , the prospect's details are passed on to an SDR for the purpose of discovery, and finally to an AE for a deeper discovery, demo, and pricing. Prospects have come to love self-serve options as they get to choose an option which meets their requirements and quickly purchase and implement the system.
From the time they view the pricing section on your website to the price proposal, customers have the option of choosing and choices. However, at the end of the process, they are given only one option and price to buy the service.
It is recommended to replicate the self-service buying experience for your prospects but keeping the price secret. This way you can frame your conversation as "These are a few different packages that suit our various customers, is there a particular tier or set of features/functionalities that resonates with your needs?"
You can then leverage the power of 's price guides in order to zero in on the exact solution your prospect is looking for.
When you know where your interest lies through your initial chat, you'll be able to design and cost out 3 custom levels to meet their requirements. They are based on the benefits of greater knowledge and the science-based principles behind single-option aversion.
Interactive Quotes can be used to create an entirely custom-designed guideline for every new customer and ensure that they're met with the best possible options regarding pricing and features.
It is also possible to incorporate Drift right in your price guides. Prospects can also ask questions in the pricing guide rather than having to send you an email, which can delay the time. This lets you change the pricing guide on the fly and gets your more close to closing the sale.
Closing up
Pricing calls can be difficult and uncomfortable. In order to build trust with your prospects accelerate your sales cycle and have more effective pricing calls
- Make your discovery process more akin to the value of coaching instead of assuming what your prospects perceive as value
- Utilize single-option aversions and self-service pricing methods to your advantage
