How to Have Better Pricing conversations -
When you conduct price calls, how do you convince a prospect that your pricing is correct?
You could tell them why your product is better over the competition...
Unfortunately, this will only get you so far.
Here are two ways to improve the quality of the quality of your price calls in 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. We'll get right to it...
Value Coaching
Pricing negotiations are bound to end in failure if there's too much daylight between the things you and your potential customers consider to be value. While it's tempting (and in fact, more flexible) to regurgitate the company-wide values and talk points, this will likely leave a disconnect between you and your prospect. There are times when it's just semantics. it's important to comprehend your customer's business. You can then frame your product or service on the basis of the business of your prospect.
This process is what I refer to as value coaching. It's an elusive concept that begins with understanding and listening rather than doing all the talking. There are two ways to understand what prospects perceive as value:
1) Effective discovery that is accompanied by a continuous conversation.
You can ask your prospective client these the following questions:
- You mentioned your sales team employs (TOOL X). Which component of this solution do you use the most with your staff? What is your approach to this issue in the present? Do you use any tools or are you accountable to it?
Check out this quote from Scott Sambucci, Founder of SalesQualia:
"Price is a benchmark for customer perceived value. If customers aren't satisfied with price, they're saying that you have not yet expressed the value that's needed for them to justify spending the money ."
Sales reps are often unable to comprehend their prospect's stack and quote too early. Asking these probing questions about what the prospects' perception of the worth of their present product will allow you to determine how your product is placed within it, and communicate that value to them.
Prior to entering pricing, make sure you identify what similar software tools they are using. After that, you'll be able to shift your discovery around what benefits these tools can provide to their users and then address the space in between.
As an example, your potential customer may view value as the amount of time they use a service. Their team may say that they use HubSpot for up to five hours per day, which makes it a great business investment.
If your item isn't one which requires users to 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 be using it 24/7.
If you decide to set your price too high the risk is that customers will be hesitant over the price. Discover what value they see in and then find ways to understand the business's challenges and ways they may perceive the value (in other words, warm the salesperson a little). Sales' best responses are either yes or no. If there is too much daylight between perceptions of value, it's both your and the prospect's best interest to walk away from the deal before expending more resources.
2.) Utilize tools to give you insights into how people interact with your website.
It is difficult to make a good discovery as most prospects are eagerly seeking out a demo or get to the price. There are techniques and tools that can help you gain insight into what interests your prospects.
- 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 the prospects you train on value rather than assuming what they want and selling an unsuitable solution.
Single Option Aversion
My second tip for having efficient calling calls to pricing is to leverage the psychological concept of one-option aversion.
Behavioural scientist Daniel Mochon posits that buyers are much more likely to purchase if given multiple choices. He conducted an experiment where buyers were shown two brands of players for DVD. 32 percent stated they'd purchase the brand they saw first while 34 percent picked the second. When the respondents were presented with a single DVD player, only 9percent or 10 percent (depending upon the type of kind of product they saw) said they would purchase the product. This represents a 66% growth in sales simple adding another choice for buyers.
Although it's not a good idea to sell B2B SaaS, the brain is able to approach almost all purchase decisions like this.
It is my opinion that this result only occurs with 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' form , the prospect's information is passed to an SDR for the purpose of discovery, and finally to an AE for further investigation, demo, as well as pricing. Prospects have come to love auto-service solutions as they have the ability the option of choosing a solution which meets their requirements quickly and then purchase and deploy the software.
When they first see your pricing page on your website to the pricing proposal, prospects are empowered with choice and alternatives. However, at the end of the process, are given only one option as well as a price for the solution.
I'd recommend replicating the self-serve purchasing experience for potential customers but 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?"
Then you can use the power of 's pricing guides to narrow in on exactly what your customer is seeking.
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 ranges to suit their preferences. These come with the benefit of greater knowledge and the scientific principles of single-option aversion.
Interactive Quotes allows you to craft a completely custom guide for each new prospect and ensure that they're met with complete choice in terms of price and options.
Additionally, you can incorporate Drift directly in your price guides. Your prospects can ask questions in the pricing guide, instead of being required to send an email. This can speed up the process. This lets you modify the guide in a flash and brings you a step further away from closing your deal.
The Wrapping up
Pricing calls can be difficult and awkward. To build trusting relationships with potential customers accelerate the sales process, and ensure you are making more effective pricing calls:
- Make your discovery process more akin to values coaching, not assuming what your prospects perceive as worth
- Use single-option aversion and self-serve pricing methodologies to benefit your business
