Sales Best Practices
The Right Way to Talk to Prospects About Pricing (without Caving) - Part 1 of 3
Mark Kosoglow, VP of Sales, Outreach
After recently securing two very large accounts, the Outreach sales team is focusing on the fact that our sales opportunities have become more consultative and less transactional. This necessitates a change in how we negotiate.
What we learned through these wins was our price really wasn’t an issue for these prospects. Large accounts have large budgets and aren’t afraid of the high price points that needle-moving solutions like ours demand. These two accounts understood their challenges but were introspective and critical of whether our solution would help solve them or not. They were thinking differently about their problem than we'd experienced during previous negotiations. However, the objection they raised was pricing...a red herring.
I want to share three ways we learned how to improve the negotiation conversation so you can make sure you’re creating tremendous value, addressing your prospects’ needs, and closing more deals.
1. Create value for your prospect. Pricing absent value is irrelevant. For example, $1/month is too much if you don’t do anything for my revenue. $1,000/month is too cheap if you deliver 100 times that to my pipeline each month. Preach value and help the prospect understand it first. If they can’t have a conversation with me about the value I’m adding to their business, then I’ve failed as a salesperson. In other words, can they “read back to you” the value to their business in their own words?
Many organizations you’re talking with are not aware of what questions to ask to effectively understand ROI and value...much less set up and execute a meaningful metrics-driven evaluation process. Uncovering the need to help the prospect with this and forcing the conversation in this direction is of utmost importance. Many deals have fallen apart because this conversation happens too late and an unacceptable level of ignorance is allowed to exist. Sounds harsh, but that’s on me, as a salesperson to eliminate.
If I’m buying something, and my first question is, “What’s the price?,” then A) the salesperson has failed to educate me on value, and B) I’m being lazy because I’m not thinking that maybe, just maybe, the company I’m considering is pricing their solution in a logical way. I should be curious to understand the reasoning behind the pricing. That’s how I think as a buyer and that’s how I want my buyers to think of me. A clear definition and understanding of value enables that type of thinking.
In summary, make value the sun around which the smaller pricing planet orbits.
In a couple of days Part 2 of 3 explains how fixing someone’s problem is another powerful negotiating tactic.