What can you do to improve pricing Discussions
In price negotiations, how do you convince someone that your price is the right one?
Some would say just tell them what you think your product does better over the competition...
Unfortunately, that will only get you so far.
Below are two strategies to help improve your pricing calls in a B2B SaaS environment that has both Sales Development Representatives (SDR) and Account Executives (AE) are engaged in the sales process. Let's start...
Value Coaching
Pricing negotiations are bound to fail if there is too much daylight between what your prospect and you view as value. Although it's tempting (and actually more adaptable) to rehash the corporate Value propositions and other talking points, it's likely to cause a disconnect between your and your prospective customer. There are times when it's just semantics. it's important to understand your prospect's business. You can then define your service or product on the basis of the business of your prospect.
This process is what I consider value coaching. This is a complex concept, but starts with listening and understanding instead of doing the talking. There are two common ways to begin understanding what your potential customers think of as valuable:
1) A successful discovery process with an ongoing dialog.
Ask your potential customer the following the following questions:
- Your sales team employs (TOOL X). What part of that solution do you use the most with your staff? What are you doing to address the issue today? Are you using any tools or are you accountable to it?
Check out this quote from Scott Sambucci, Founder of SalesQualia:
"Price is a benchmark for the value that customers perceive to be worth. If a customer balks at price, they're telling you that you have not yet conveyed the perceived value necessary to justify your expenditure ."
Sales reps often don't understand the stack of their prospects and often quote too early. These probing questions about how the prospect perceives the worth of their present product will allow you to determine how your product is placed into it and then present that value to them.
Before you enter pricing, make sure you identify the similar tools that the company uses. Then you can change your focus to what value those tools bring to their users and then address the space between.
For example, your prospect may view value as the time they spend using a product. Their team may say that they use HubSpot for five hours a each day, making HubSpot a good choice for them to invest in their business.
If your product doesn't have a feature that demands the user stay for a whole day in it, you need to explain the user why your product has value even though they won't use it for a long time.
If you decide to set your price too high it is possible that they will balk at the cost. Find out what they value and then find an opportunity to connect with their business pains and how they will see worth (in other words, warm their hearts a little). The best answers in sales are 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 deal before expending more resources.
2.) Leverage tools that offer insight into how your prospect interacts with your website.
Finding the right way to discover is a challenge since the majority of prospects are seeking out a demo or to reach the price point. There are tools and strategies you can use to discover what is appealing to those who are interested.
- Uberflip: create personalized content experiences for your prospects. Their analytics tool provides insights into the types of the content that your customers are consuming.
The two methods listed above will help the prospects you train about value, rather than guessing what they want and selling the wrong product.
Single Option Aversion
The second suggestion for making efficient calling calls to pricing is to use the psychological principle behind single-option aversion.
Behavioural scientist Daniel Mochon posits that consumers are more likely to make a purchase when they are presented with multiple choices. The study was conducted by Mochon in which consumers were presented with two different brands that play DVDs. 32% stated they'd purchase the brand they saw first and 34 percent picked the second. However, when participants were shown just one DVD player, only 9% of them or 10 percent (depending on which brand they saw) stated they would buy the DVD player. It's a 66% rise in sales simple adding another alternative for the purchaser.
Although it's not a good idea to sell B2B SaaS, the mind approaches nearly every purchase decision this way.
It is my opinion that this effect only increases 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 data is sent to an SDR to discover the information and later to an AE for further investigation, demo, as well as pricing. Prospects are now enthralled by self-serve options as they get the option of choosing a solution that meets their preferences as well as quickly buy and install the system.
From the time they view the pricing section on your site, to your pricing proposal, prospects can choose from a variety of options. However, at the end of the process, are presented with only one choice as well as a price for the solution.
I'd recommend replicating the self-serve purchase experience for prospective customers 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?"
Then you can use the power of 's price guides in order to zero in to the specific solution that your prospect is looking for.
After you discover where their interest lies through your initial chat, you'll be able to design and set the price for 2-3 custom levels to meet their requirements. They are based on the benefits of a greater understanding and fundamentals of single-option aversion.
Interactive Quotes lets you create a completely custom guide for every new customer and ensure that they're met with a wide range of options regarding prices and other features.
It is also possible to add Drift right into your pricing guides. Customers can have questions in the pricing guide instead of being required to send an email. This can speed up the procedure. This allows you to make guide changes in a flash and brings you a step further away from closing your sale.
Closing Up
Pricing calls can be difficult and awkward. In order to build trust with your prospects accelerate your sales cycle, and have more effective pricing calls
- Change the way you approach discovery by the value of coaching instead of presuming what your potential clients perceive as valuable
- Use single-option aversion and self-serve pricing strategies to your advantage
