What can you do to improve pricing Discussions
During pricing calls What can you do to convince someone that your price is the right one?
Some would say just tell them the reason why your product is superior than the alternatives...
Unfortunately, this will only get you only so far.
Below are two strategies to help improve the effectiveness of your pricing calls within a B2B SaaS environment in which there are both Sales Development Representatives (SDR) as well as Account Executives (AE) are involved in the sales cycle. Let's get to it...
Value Coaching
Negotiations on pricing are likely to be unsuccessful if there's an inordinate amount of difference between what you and your prospects view as value. While it's tempting (and actually more adaptable) to regurgitate the company-wide value propositions and talking points, this will likely create a gap between you and your prospective customer. It's not always about semantics, but it's important to understand your prospect's business. Then, you can design your product or service in terms of what is valuable to their business.
The process that I use is known as call value coaching. This is a complex concept, but it starts by listening and understanding instead of talking. There are two ways to start understanding what prospective customers perceive as worth:
1) An effective discovery process with an ongoing conversation.
You can ask your prospective client these the following questions:
- You mentioned your sales team employs (TOOL X). What part of that solution is used most by your employees? What is your approach to the issue today? Are you using any tools and are you responsible 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 customers aren't satisfied with price, they are telling you that you've not yet communicated the perception of value that's needed to justify the expenditure ."
Sales reps are often unable to comprehend the stack of their prospects and often quote too early. Asking these probing questions about how the prospect perceives the value of their present stack will help you to discover how your product fits in it, and to present that value to them.
Prior to entering pricing ensure that you know the similar tools that the company uses. Then you can change your focus to what value those tools bring to them , and also address any area between.
For example, your prospect may view value as the amount of time they use a service. The team they work with uses HubSpot at least five hours a each day, making it an excellent investment for their company.
If your product isn't one that requires the user to stay for a whole day in it You must explain to them why it brings worth even though they will not be using it 24/7.
Be aware that if you set the set your price too high, you risk them balking over the price. Find out what they value and discover ways to understand the business's challenges and ways they will perceive the value (in the sense of warming them up a bit). Sales' best responses are either yes or no. If there is too much daylight between perceptions of worth, it's in both your and your prospects best interest to walk away from the sale before committing excessive resources.
2.) Leverage tools that provide you with insights on how your prospect interacts with your content.
It is difficult to make a good discovery because most potential customers are looking to view a demonstration or get to the cost point. There are techniques and tools that can help you get a better understanding of what appeals to those who are interested.
- Uberflip: create personalized content experiences for your prospects. Their analytics tool provides an insight into what content your prospects are engaging.
The two methods listed above will help you coach your prospects on value rather than assuming what they want and selling the wrong solution.
Single Option Alternative
My second tip for having effective pricing calls is to leverage the psychological principle behind single-option aversion.
Behavioural scientist Daniel Mochon posits that consumers are more likely to purchase when they are given several options. Mochon conducted an experiment in which customers were shown two models of players for DVD. 32 percent indicated they would buy the first one, and 34 percent picked the second. But when the participants were shown just one DVD player, just 9percent (or 10 percent (depending upon the type of kind of product they saw) said they would purchase the product. That's a 66% growth in sales simple adding another choice for buyers.
Even though it is selling B2B SaaS in the past, the brain approaches almost all purchase decisions like this.
This impact only grows when you are 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.
For most businesses, when someone uses the 'contact us' form that prospect's data is sent to an SDR for the purpose of discovery, and finally to an AE for further discovery, demo, and pricing. Prospects have come to love the self-service options, as they are able to choose an option that meets their preferences as well as quickly buy and install the software.
From the moment they see your pricing page on your website to the pricing proposal, prospects are empowered with choice and choices. At the conclusion of the process, are given only one option and a cost to purchase the solution.
I'd suggest replicating the self-service purchase experience for prospective customers while keeping the price hidden. 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?"
From there you can leverage the power of 's pricing guides to narrow in on the exact solution the prospect wants.
After you discover where their interests lie through the initial discussion, you are able to create and cost out 3 custom tiers for their needs. This is a benefit of greater knowledge and the fundamentals of single-option aversion.
Interactive Quotes can be used to create a completely custom guide for every new customer and ensure that they're met with complete choice regarding prices and other features.
You can also add Drift right in your price guides. Your prospects can ask inquiries while reading the price guide rather than being required to send an email, which can delay the process. This lets you modify the guide in a flash and brings your closer to closing the deal.
The Wrapping Up
Price calls can be a challenge and uneasy. To build trusting relationships with your prospects accelerate your sales cycle and make more efficient pricing calls:
- Reframe your discovery process by value coaching rather than taking your prospect's perceptions as valuable
- Use single-option aversion and self-serve pricing strategies to your advantage
