Increase Prices Like Salesforce
Eric Janssen
Former CRO | Teaching Sales & Entrepreneurship at the Ivey Business School
How do you increase your prices?
I wish increasing prices was as easy for everyone as it is for Salesforce.com - or maybe it is. The attached is a screenshot of an e-mail sent to our billing department.
While I don't recall the '7% annual price increase' clause, I'm sure I agreed to it three years ago. In that time, Salesforce.com has become so ingrained in our organization that the idea of switching at this point is unmentionable.
They've provided incredible value to our organization, and we use their product as the lifeblood of our company generating everything from staffing plans, shipping strategy, financial projections, billing...I can't think of one part of the organization that Salesforce doesn't touch.
If you're adding enough value, increasing prices shouldn't make your partners flinch.
When I got this e-mail I wasn't at all mad (even though I think their sales team could have been more upfront about this clause!), all I thought was: how can I make my own company so integral in our customers operations that a 7% ANNUAL price bump 'just because' is completely justified.
I'd go so far as to say the price could double, and I'd still be a customer - though don't get any ideas Salesforce!
Isn't this the dream scenario that we're all striving for? We all want to create a product or service that is so adored and integrated into your daily operation that the idea of not having it is unfathomable.
How many sales leaders would like to show a 7% revenue increase as a 'do nothing' scenario?
If you're adding enough value, increasing prices shouldn't make your partners flinch.
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7 年Dear Sina, Receiving an automatic email (very important from the legal point of view) does not mean that the AE would not communicate with the customer. A good AE usually starts a conversation with the customer before the Billing System sends this email through his/her regular communication with the customer.
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7 年I totally agree with the author's insights regarding the correlation between value and price. However, if you are an enterprise software vendor, I don't ever recommend communicating a 7% price increase on a renewal via an automated e-mail in the way Salesforce seems to have done above. It's as if they're hoping you don't notice. The account manager should pick up the phone and call the customer to communicate the benefits of the price increase and get acknowledgment. It's odd for a leading CRM software provider to forget the fundamentals of human interaction. I know plenty of sales organizations that have gotten similar e-mails and went shopping for an alternative solution. Part of the reason could be because of the way the price increase was communicated to them. The price increase itself isn't my issue. Eric's points are valid.