Close Deals Faster: Leverage Slab Pricing on Visits
Aravindan Varatharajan
eCommerce | Solution Migration, Integration & Building Analytics
Introduction
In the competitive landscape of B2B sales, particularly in the FMCG and F&B sectors, having the right tools and strategies can make a significant difference. One such powerful tool is volume-based slab pricing. This pricing strategy not only incentivizes larger purchases but also helps salespeople effectively negotiate and close deals during customer visits. This blog explores how volume-based slab pricing works and how it can help salespeople win orders.
Understanding Volume-Based Slab Pricing
What is Volume-Based Slab Pricing?
Volume-based slab pricing is a pricing strategy where discounts are applied based on the quantity of goods purchased. The more a customer buys, the lower the per-unit price, encouraging bulk purchases. This approach creates "slabs" or tiers of pricing, where each slab corresponds to a different discount level based on the volume ordered.
How It Works
Benefits of Volume-Based Slab Pricing for Salespeople
Encourages Larger Orders
Incentivizing Bulk Purchases
Volume-based slab pricing directly incentivizes customers to place larger orders to benefit from lower per-unit costs. This can be particularly persuasive during face-to-face sales visits, where the salesperson can explain the tangible savings.
Demonstrating Value
Salespeople can easily demonstrate the value of placing a larger order by showing the cost savings at different slab levels. This visual and numerical representation helps customers see the financial benefits more clearly.
Simplifies Negotiation
Transparent Pricing Structure
Having a clear and transparent pricing structure makes negotiations straightforward. Customers understand the discount levels and can make informed decisions based on their purchasing capacity.
Reduced Price Haggling
With predefined discount slabs, there is less room for price haggling, making the negotiation process smoother and faster. Salespeople can focus on building relationships and discussing product benefits rather than getting bogged down in price discussions.
Builds Long-Term Relationships
Customer Loyalty
Offering volume-based discounts can help build long-term relationships with customers. By providing financial incentives for larger orders, businesses can encourage repeat purchases and foster customer loyalty.
Trust and Transparency
A transparent pricing model builds trust with customers. When customers know they are getting the best possible price based on their purchase volume, they are more likely to trust the salesperson and the business.
Implementing Volume-Based Slab Pricing
Defining Slabs and Discounts
Analyze Historical Data
Analyze historical sales data to determine the most effective slabs and discount levels. Understand purchasing patterns and average order sizes to set realistic and attractive slabs.
Set Clear Slab Levels
Define clear and logical slab levels that are easy for customers to understand. For example:
Training Sales Teams
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Educate on Pricing Strategy
Ensure that the sales team is well-versed in the volume-based slab pricing strategy. They should understand how to explain the pricing structure and its benefits to customers.
Role-Playing Scenarios
Conduct role-playing scenarios to practice presenting the pricing model and handling customer objections. This preparation helps salespeople become more confident and effective during actual customer visits.
Leveraging Technology
Sales App
Use the Sales app to manage and track volume-based slab pricing. These tools can automate the calculation of discounts based on order size, ensuring accuracy and efficiency.
Real-Time Data Access
Equip sales teams with mobile devices or apps that provide real-time access to pricing data. This access allows them to quickly show customers the benefits of placing larger orders during their visits.
Case Studies
Case Study 1: FMCG Distributor
An FMCG distributor implemented a volume-based slab pricing strategy to boost sales during customer visits. By offering tiered discounts, the sales team encouraged grocery stores and small retailers to place larger orders. The result was a 25% increase in average order size and a significant boost in overall sales.
Case Study 2: F&B Supplier
An F&B supplier serving HoReCa establishments introduced volume-based slab pricing to drive bulk purchases. During sales visits, representatives demonstrated the cost savings of ordering in larger quantities. This approach led to a 30% increase in order volumes and strengthened relationships with key customers.
Best Practices for Sales Visits with Volume-Based Slab Pricing
Preparation and Planning
Know Your Customer
Before the visit, research the customer's buying patterns and preferences. Tailor your pitch to show how volume-based slab pricing can meet their specific needs and save them money.
Bring Supporting Materials
Prepare visual aids, such as charts or brochures, that clearly outline the pricing slabs and corresponding discounts. These materials can help customers easily grasp the benefits.
Presentation Techniques
Focus on Value
Emphasize the value and cost savings of placing larger orders. Use real-world examples and scenarios to illustrate how the customer can benefit from the pricing structure.
Be Transparent
Be upfront about how the pricing slabs work and ensure that the customer fully understands the terms. Transparency builds trust and encourages customers to take advantage of the discounts.
Follow-Up Strategies
Confirm Understanding
After the visit, follow up with the customer to confirm their understanding of the pricing structure and answer any additional questions they might have.
Provide Ongoing Support
Offer ongoing support and assistance to help customers maximize the benefits of volume-based slab pricing. This support could include regular check-ins, additional training, or personalized recommendations.
Conclusion
Volume-based slab pricing is a powerful tool that can help salespeople win orders during customer visits in the FMCG and F&B sectors. By encouraging larger orders, simplifying negotiations, and building long-term customer relationships, this pricing strategy can significantly enhance sales performance. Implementing volume-based slab pricing requires careful planning, effective training, and leveraging technology, but the benefits make it a worthwhile investment. By adopting this strategy, sales teams can drive growth, increase customer satisfaction, and achieve sustained success in a competitive market.