How do you differentiate your products and services offerings from the competition to protect your prices?
Several factors can appeal to customers over pure price. Brand equity, trust, positive reviews, and associated value-added services.
Have you clearly defined your value proposition?
Sales and marketing alignment needs to have done their job in advance. Your website and sales process should have case studies, endorsements, and references positioned or at the ready to differentiate your offerings and influence the customer in your direction.
Are you targeting the right “sweet-spot, good-fit” prospects?
Don’t forget about FOMO and plan deal programs with expiry dates to create an urgency, a demand that influences potential customers to act sooner.
Do you have a great BANT process? (budget, authority, need and timeline)
Don’t wait to be blindsided by your potential customer’s requests and objections, plan scenarios out in advance and make sure your sales team understands how to handle them. Play good cop bad cop, “I have to speak to my manager about any discounts.” Feel the deal out and know when it is time to shut up and ask for the money.
SLAs should be in place so that you have a process of holding people accountable and you can apply attribution to deals to give credit where credit is due.
Protecting Price in Enterprise Sales Deals
A good BANT Process
This is where having a good BANT process and regular deal updates are important. My favorite before a deal even gets into the queue is budget, sponsor, timeline. Your salespeople need to validate they have all 3 of these questions locked in before you can start factoring close. The longer the deal cycle takes to move forward to close and you let sponsors bring in more voices and stakeholders in their company who will bring up issues and have biases and opinions this will lessen your percentage of closing the deal.
When the customer wants a deal make it contingent on a Yes!
As you get through validating your offering with subject matter experts, user demos, analytics, etc., your customer will very likely start to look into the price. Everyone loves a win, “I saved 10%” whatever that is you don’t want to just come off your list price without a concession on the other side. You may agree to lower the deal by 10% but you want an extra year on the contract. When you get to this stage, it is imperative that you make sure that it is understood that if we give a 10% reduction with conditions, one of them is that the deal is agreed to verbally shortly followed by a written agreement. You also must be willing to walk away at this stage.
BRAND = TRUST
If you have spent the time building a great name for yourself in the marketplace and community price becomes less of an issue because you have the name and reputation that follows you. If it comes down to a three-horse race, your brand can nullify pricing. Who wants to drive a Yugo when you have the option of a Ford? Name-value isn’t just familiarity, it is what stands behind the name-value, that is trust, differentiation, brand reputation. (For more on what a brand is read…..)
So you are at an impasse with your potential client, you and your competitor are about the same lower price and brand reputation is equitable. What to do? You should have white papers, analyst reports, Gartner magic quadrants, case studies, endorsements, and references at the ready or already in the hands of the client. But what about a little extra value like extended support services, tickets to user conferences, access to SMEs, free or reduced-price training? These are the kinds of value-adds that can be the difference.
Protecting Price in Services Deals
These deals are heavily predicated on billing hourly workers. It is important to understand that you cannot just give away your people’s time as this could pull them off other projects and end up costing you more in the long run. When customers want a reduction or free services hours this is where you need to examine the effect on your (TCV) Total Contract Value to understand what it does to your margins. You may want to throw some unbilled services time into a larger SaaS deal to help the client get up and running or fix issues but make sure the client knows in advance you are giving them something they should be paying for.
If what you sell is purely services, for instance, people who do eDiscovery project management, Marketing Automation Specialists, your software implementation team, or your local Mechanics. These people earn their living through hourly billing. Usually, you commit to pay them a set wage and make a profit from billing them to customers. So how do you have a price protection solution for services?
Build the profile of those who you bill out. Use your website to shine a light on their accomplishments, experience, skillset, and qualifications. For each project they do they should write up a simple case study, Problem, Solution, and Benefits of working with that client. Keep it anonymous if the client doesn’t agree to participate.
BRAND = TRUST
Don’t underestimate the brand perception that potential customers have as to how big or respected your brand is. If you have spent the time building a great name for yourself in the marketplace and community price becomes less of an issue because you have the name and reputation that follows you. Name-value isn’t just familiarity, it is what stands behind it and that is trust and brand reputation. (For more on what a brand is read…..)
Here is where you flip the script and use the product as the value-add, extend a contract, a free month-for access to SaaS software, tickets to user conferences, free or reduced-priced online training? These are the kinds of value-adds that can be the difference-maker.
Protecting Price in Product Sales
Very few businesses have the protection of their products that they can confidently state “this is not a commodity”! But the reality is true. A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers.
Product pricing has more pressure than enterprise or services do. But don’t think that this thinking is uniform. Do some research into your competitors and see what variations there are on price and why? This will help you get a better handle on how to price your items. Consumers love low prices but are still willing to pay extra for differentiated products with higher perceived quality.
Easy Sales Channels
First, your website should be fine-tuned to perform for you while you sleep with people clicking and buying without having to interact. In 2021 if your site is not generating direct sales for you then you need help. The value-proposition for what you are selling should be presented on your site. The product images should be high quality and the descriptions ready for SEO. Remember, the internet sees and knows the information you provide this is why SEO is so important. This store on your site should be the feed that goes out to Facebook, Google, and the myriad of stores wanting to sell your products as a third-party vendor. Lower-priced products that are perceived to be equitable will be purchased with convenience and ease of checkout.
Direct Phone and Chat Access
Consumers who are ready to act want to be able to talk with a person who can answer last-minute questions, so have your phone number and chatbot clearly visible on the site and encourage conversations, it is a great way to build your brand.
You should have affiliate programs in place to amplify your reach and community. When people with their own community or influencers pass links to your site it is an endorsement and that is valuable, hence why they get affiliate income for doing that.
Don’t just give away money and trim your margins with coupons, get creative. Make a coupon offering that increases the deal size like buy 2 get a third free. Or Buy this month and get free training.
Repackage to Win
Manufacturers have seen great success in repackaging their offerings to win with consumers. Think along the lines of “25% extra product FREE, for the price of a 32oz bottle, or buy a second one and save 50%. Get consumers to sign up for newsletters, rewards programs, and such when you give a discount.
BRAND = TRUST
Don’t underestimate as a smaller brand the perception that potential customers have as to how big or respected your brand is. If you have spent the time building a great name for yourself in the marketplace and community price becomes less of an issue because you have the name and reputation that follows you. Name-value isn’t just familiarity, it is what stands behind it and that is customer service, reviews, endorsements, trust, and brand reputation. (For more on what a brand is read…..)
Offer Free Shipping
Free Shipping has become a must for a vast array of consumer products. It is almost harder now to convince buyers that they should have to pay for shipping. So you need to factor an aggregate shipping cost into your margins.
So you don’t have much left to lower the price as margins are tight. What to do? You should have case studies, endorsements, and references positioned for your clients. But what about a little extra value like extended support services, access to an online portal for VIPs, free or reduced-price training? These are the kinds of value-adds that can be the difference.
Product Bulk Sales
A good simple Sales BANT Process
You should have a simple BANT process that works for you now and can be used when you grow with salespeople. You don’t want to lose sight of bigger bulk orders or contractor orders where shipping is more complex and not free. You need to document the potential deals in your CRM so you don’t lose sight of them. Validating the budget, sponsor, the timeline is a little more straightforward in this scenario. You and your salespeople need to validate they have all 3 of these questions locked in before you can start factoring a path to close.
When the customer wants a deal make it contingent on a Yes!
Everyone loves a win, “I saved 10%” whatever that is, you don’t want to just come off your offer price without a concession on the other side. You may agree to lower the deal by 10% but you want them to take a larger amount of product at that discounted price.
Author Ian Faith, Business development consultant, sales and marketing executive. If you are struggling with growing your business and want help fine tuning your sales and marketing channels we may be able to help you. Contact 877-855-6755 or fill out our forms at www.globalcreativegroup.com to book a discovery call.