Tips to have better pricing Discussions
When you conduct price calls, how do you convince a prospect that your price is right?
You could tell them why your product is better over the competition...
However, it can only take you so far.
There are two methods to improve the quality of the quality of your price calls in B2B SaaS environments that has both Sales Development Representatives (SDR) and Account Executives (AE) are engaged in the sales process. We'll get right to it...
Value Coaching
Negotiations on pricing are likely to end in failure if there's the need to differentiate between the things you and your potential customers think is worth their time. It's tempting (and actually more adaptable) to repeat the same company-wide Value propositions and other talking points, it's more likely to create a gap between you and your potential customer. It's not always about semantics, but it's essential to fully understand your prospect's business. You can then frame your product or service on the basis of their business.
This is the process I consider value coaching. It's an elusive concept that begins with understanding and listening instead of talking. There are two common ways to begin understanding what your prospective customers perceive as worth:
1) A successful discovery process with an ongoing dialogue.
Ask your potential customer the following questions:
- The sales staff you spoke to employs (TOOL X). What part of that solution does the most use by your employees? What is your approach to this issue in the present? Are you using any tools and are you responsible to it?
Consider this quote from Scott Sambucci, Founder of SalesQualia:
"Price is a benchmark for perceptions of value by customers. If customers aren't satisfied with price, they are telling you that you have not yet conveyed the perceived worth that is required to justify your expenditure ."
Sales reps often don't understand their customer's stack, and they often make statements too soon. These probing questions about what the prospects' perception of the value of their current stack can help you discover how your product fits within it, and communicate that value to them.
Before you enter pricing be sure to determine which similar tools to the ones they use. After that, you'll be able to change your focus to what benefits these tools can provide to them and address the area in between.
For example, your prospect may view value as how long they use a service. They'll say their team uses HubSpot for five hours per day, which makes HubSpot a good investment for their company.
If your product doesn't have a feature that requires the user to be glued to it for the entire day It is important to communicate to them why it brings worth even though they will not have to use it continuously.
Be aware that if you set the make your pricing too soon it is possible that they will balk at the price. Discover what value they see in, and find an opportunity to connect with their struggles in business and the ways they might consider value (in the sense of warming their hearts a little). Sales' best responses are yes or no. If there's too much daylight between perceptions of worth, it's in both your and your prospects best interest to walk away of the transaction before investing more resources.
2) Utilize tools to give you insights into the way your audience interacts with your content.
Effective discovery is very difficult since the majority of prospects are seeking out a demo or reach a price point. There are tools and techniques that can help you get a better understanding of what appeals to the prospects.
- Uberflip: create personalized content experiences for your prospects. Their analytics tool provides insight into which pieces of information your visitors are interested in.
The two methods listed above will help to educate your potential customers on value rather than assuming what they want and selling an unsuitable solution.
Single Option Alternative
My second tip for having effective price calls, is to leverage the psychological concept of one-option aversion.
Behavioural researcher Daniel Mochon posits that buyers are much more likely to purchase when they are presented with several options. He conducted an experiment where consumers were presented with two different brands that play DVDs. 32 percent stated they'd purchase the brand they saw first while 34% chose the other. But when the participants were presented with a single DVD player, just 9% (or 10 percent (depending upon the type of type of brand they were shown) said they would purchase the item. This represents an 66 percent rise in sales just adding another option for the buyer.
Even though it is selling B2B SaaS however, the human brain is able to approach almost all purchase decisions like this.
It is my opinion that this result only occurs when you are in B2B SaaS environments.
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.
In most companies, when someone uses the 'contact us' page, their information is passed to an SDR for discovery and then to an AE to conduct a more thorough exploration, demonstration, and pricing. Prospects are now enthralled by the self-service options, as they are able the option of choosing a solution that meets their preferences quickly and then purchase and deploy the software.
From the moment they see your pricing page on your website to the pricing proposal, prospects can choose from a variety of options. But at the end of the process, are presented with only one choice as well as a price for the solution.
It is recommended to replicate the self-service buying experience for your prospects however, keeping the cost 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?"
From there you can leverage the power of 's price guides to focus on the exact solution your prospect is looking for.
After you discover where their most interested is through your first discussion, you are able to create and price out 2-3 customized levels to meet their requirements. They are based on the benefits of a greater understanding and scientific principles of single-option aversion.
Interactive Quotes lets you create completely customized guides to each prospect you meet and ensure that they're met with complete choice when it comes to prices and other features.
Additionally, you can add Drift right into your pricing guides. Your prospects can ask inquiries while reading the price guide, instead of being required to send an email, which can delay the time. This lets you make guide changes in a flash and brings you that much further away from closing your deal.
Closing Up
Pricing calls can be difficult and uneasy. To build trusting relationships with your customers increase the speed of your sales cycle, and ensure you are making more effective pricing calls:
- Change the way you approach discovery by value coaching rather than assuming what your prospects perceive as worth
- Utilize single-option aversions and self-service pricing strategies to benefit your business
