How to Have Better Pricing Conversations -
During pricing calls How do you convince someone that the price you offer is correct?
You could tell them the reason why your product is superior in comparison to the other products...
Unfortunately, that can only take you so far.
Below are two strategies that can help you improve the quality of your price calls in an environment that is B2B, that has each of Sales Development Representatives (SDR) and Account Executives (AE) are part of the sales cycle. We'll get right to it...
Value Coaching
Price negotiations will surely end in failure if there's the need to differentiate between what you and your prospects think is worth their time. It's tempting (and in fact, more flexible) to regurgitate the company-wide value propositions and talking points, it's more likely to create a gap between you and your potential customer. There are times when it's just semantics. 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 company.
This process is what I call value coaching. It's an elusive concept that begins with understanding and listening instead of talking. There are two methods to start understanding what potential customers think of as valuable:
1) An effective discovery process through a continual conversation.
You can ask your prospective client these questions:
- You mentioned your sales team employs (TOOL X). What part of that solution do you use the most with your staff? What is your approach to the issue today? Are you using any of the tools and do you have any responsibility for it?
Consider this quote from Scott Sambucci, Founder of SalesQualia:
"Price can be a reference point for the value that customers perceive to be worth. If a customer balks at price, they are saying that you have not yet communicated the perception of worth that is required to justify your expenditure ."
Sales representatives often do not understand the stack of their prospects and often quote too soon. Asking these probing questions about how the prospect perceives the worth of their present product will allow you to find out how your product can fit into it and then present that value to them.
Prior to entering pricing ensure that you know what similar software tools they use. You can then shift your discovery around what they can bring their users and then address the space between.
For example, your prospect could see value in how long they use a service. They'll say their team uses HubSpot for up to five hours a day, making it a great choice for them to invest in their business.
If your item isn't one that demands the user be glued to it for the entire day, you need to explain to your customers why the product adds benefits even though they may not use it for a long time.
Be aware that if you set the set your price too high, you risk them balking at the price. Discover what value they see in and then find a way to empathize with the business's challenges and ways they will see worth (in other words, warm their hearts a little). Sales' best responses can be either no or yes. If there's an inordinate amount of difference between the perceptions of value, it's in both yours and the prospects most beneficial interest to pull away of the transaction before investing too many resources.
2) Utilize tools to provide you with insights on the way your audience interacts with your website.
Effective discovery is very difficult as most prospects are eagerly trying to see a demo or get to the price point. There are tools and strategies that you can employ to 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 the content that your customers are consuming.
These two tactics will help to educate your potential customers to be more valuable rather than simply assuming what they would like and offering an unsuitable solution.
Single Option Aversion
My second tip for having efficient price calls, is to use the psychological principle behind single-option aversion.
Behavioural scientist Daniel Mochon posits that customers are more likely to make a purchase if presented with more than one option. Mochon conducted an experiment in which consumers were presented with two different brands of players for DVD. 32 percent stated they'd purchase the brand they saw first while 34 percent selected the second. When the respondents were presented with a single DVD player, only 10% or 10% (depending on which brand they saw) said they would purchase the item. That's a 66 percent rise in sales just adding another choice for buyers.
Even though it is selling B2B SaaS however, the human mind approaches nearly every purchase decision this way.
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.
Most companies will ensure that when someone uses the 'contact us' form , the prospect's details are passed on to an SDR for the purpose of discovery, and finally to an AE for further discovery, demo, and pricing. Prospects are now enthralled by self-serve options as they get to choose an option which meets their requirements quickly and then purchase and deploy the software.
When they first see the pricing section on your website to the pricing proposal, prospects can choose from a variety of alternatives. But at the end of the process, are presented with only one choice and price to buy the service.
It is recommended to replicate the self-service purchase experience for prospective customers 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?"
You can then leverage the strength of's price guides in order to zero in to the specific solution that your prospect is looking for.
When you know where your interests lie through the initial chat, you'll be able to design and cost out 3 custom ranges to suit their preferences. 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 for every new customer, ensuring they are met with a wide range of options in terms of price and options.
Additionally, you can add Drift directly into your pricing guides. Customers can have questions in the pricing guide rather than needing to write you an email. This can speed up the process. It allows you to change the pricing guide on the fly and gets you that much more close to closing the deal.
Closing Up
Price calls can be a challenge and awkward. For building trust with your prospects increase the speed of your sales cycle and make more efficient pricing calls:
- Change the way you approach discovery by the value of coaching instead of presuming what your potential clients perceive as worth
- Utilize single-option aversions and self-service pricing methods to increase your profits
