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Pricing and sales teams often have a tense relationship, but it doesn't have to be that way. This presentation looks at why sales teams view pricing initiatives with skepticism, and how to move to a collaborative relationship where pricing helps sales.
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Pricing & Sales: From Rivals to
AlliesProfessional Pricing Society Spring Conference May 10, 2012. Chicago
Reuben SwartzFounder, Mimiran
Wild West
Command and Control
Turf War
The proverbial
1%
What sales hears:
“Sales prevention”
Why?
Opportunities x Avg Selling Price x Close %
Sales Cycle LengthRevenue =
1 x $100,000 x 3%1 month
= $3k/m
1 x $105,000 x 3%1.5 months
= $2.1k/m
1 x $105,000 x 100%1.5 months
= $5k incrementa
l
Baseline
Agent Selling Your House
Agent Selling Own House
In which scenario do your sales reps live?
Example1,000 x $100,000 x 25%
1 month= $75M/qtr
1,000 x $101,000 x 25%
1.06 month= $71.5M/qtr
1,000 x $101,000 x 24%
1.06 month= $68M/qtr
Profit vs Revenue Graph
Price ($)
Volume
Price that maximizes profit
Price that maximizes revenue
Demand
Revenue
Cost
Profit
Going Native
“We are our own worst competitor!”
•SVP Sales & Marketing, Global 2000 Manufacturer
Pricing Support
List Price
Price Floor
Price Change
List Price
Price Floor
Dangers of Discounts
A place for old discounts
Omelet Pricing:Take away price, take away
value
What’s the least time a rep can
spend negotiating price?
Software Projects1,000 x $100,000 x 25%
1 month= $75M/qtr
1,000 x $101,000 x 24%
1.06 month= $68M/qtr
1,050 x $101,000 x 26%
0.94 month= $88M/qtr
Don’t Fight a Turf War
Lead G
en
Pro
spect
ing
Needs
Analy
sis
Quote
Pro
posa
l
Negoti
ati
on
Approval Process
The “Right” Leads and Message Automate, including appropriate discount options
Streamlined
Mimiran: Online Proposals Made Easy
Push to the Edge
No: 100% approved “approval process”
Yes: Meaningful pricing guidance and options
No: Unearned, unmanageable discounts
Yes: Optimize entire sales process
My to do list
Recommended