No matter how much you analyse pricing, no matter what systems and software you use, someone has to talk to the customer….

I remember speaking at a sales conference for a major industrial company a number of years ago.???I arrived the evening before and had dinner with the client.?Almost everyone I spoke to told me that they delivered “great value” to their customers.?In fact, I was told this so often that I decided further investigation was required.?

The following morning...

I asked the various groups to define value.?There were probably around 10 tables of 12 people.?The result was 10 different definitions, one of which is now the definition of value that we use.?It became apparent that not only couldn’t they define value, but that they had no real idea of the constituent elements of value – what we now call The Value Triad?.

On many of the workshops I run I’m regularly told how wonderful the company’s products or services are and what great value they deliver.?Despite that, their prices are frequently the same as, or less than, the competition.?When asked why, there are usually a variety of answers:

“If we put our prices up we’d lose the business”

“Our customers only care about price”.

But there is one reason they rarely give us – they don’t understand value and how to quantify it in monetary terms.

There are also companies that tell us that their products are commodities and that their only real differentiation is price. Frequently they turn out to have a larger market share than their competitors – suggesting they are delivering something over and above competitors that their customers value.

?It’s that “Discount Default” Again!

The problem that many sales people face is that they simply don’t understand value in enough depth to feel truly confident discussing it with customers.?Without that understanding it is all too easy to revert to price as the primary differentiator.?This is what I call the “discount default”.?When any pressure is applied the first response is to offer a discount.?

Buyers know this, so whether you really are too expensive or not, most buyers will tell you that you are – in the almost certain knowledge they will get a discount.

The role of the sales force in delivering pricing excellence cannot be underestimated.?They are one of the key points at which your business and the customer’s business truly meet.?As a result you need people who feel comfortable exploring and identifying customer’s key challenges and issues, communicating those back to your business, and then effectively communicating your differentiated solutions to the customer.?And capturing some of that shared value through effective pricing.

What can you do?

• Make sure you are looking at value from the customer’s perspective, not your own
• Differentiate your offering in ways that clearly deliver the value that customers are looking for.?Being different is not, necessarily, a valuable differentiation.
• Just because you can doesn’t mean you should!
• Make sure you and your sales team:
• Have the knowledge and skills to discuss value effectively with your customers – really know and feel confident using QLS:

1. Questioning
2. Listening
3. Summarising

• Understand your value
• Communicate your value effectively – develop powerful, persuasive Value Propositions
• Be ?confident discussing and defending price - be proud of your price!
• Do not operate in “discount default” mode, move towards a value default.

If any of the issues resonate with you, get in touch. Just book a date in my diary and let's talk value!