Here it is – the reason for majority of „closed-losts” and subject of ancient question „name it at beginning or end of the deal?” – PRICE! Price is a both a value reacting to the market as well as (through art-like pricing strategy plays) creating it. That is why as a seller you need to understand the price – and what can you do with it.
A few assumptions, that I make upfront:
- What sales environment is it?
It’s B2B Channel Sales – the pricing given to end-user is composed from Licenses, Deployment & Config Services, Consultancy, Distributor and Re-Seller Margin… Bottom-line – final project price is complex and doing right comparison will be hard for your Customer. - What is the engagement level?
How long is the sales cycle, how many people are engaged, what are your/distri’s/partner’s
relations with the decision committee. Do we have direct access to power? How good is
our champion? Good enough to defend us? How detailed is evaluation process? What are
the constraints of purchasing department (e.g. budget tied to this fiscal year)
The above find direct connection to three rules I always keep in mind when engaging in pricing discussions for most important projects. Remember – „In the world where information hold the value – the information about assets price and available discounts, hold a great value”. This is why it is good to consider the following:
- Never present pricing without proper discovery.
„Presenting the prescription without diagnosis is a mistake in medical-art” - Present full offer on a dedicated session.
The more complex the pricing structure, the more value to Customer. Possibility to gain additional points from Procurement. - Always try to present price to decision makers yourself, or at least co-present. If you cannot, make sure you prepare your champion to present the price. If he is hesitant/unwilling – not your champion.
- Never negotiate pricing over email – you de-value the information, create detachment from the deal.
- Never go out of all your discounts upfront – everyone has their own „current fair market price”.
Not so sophisticated, but believe having in mind things above can cut your negotiating burden quite significantly. Of course, multi-million dollar deals go far more than that but… You’ll have time on learn more on the way 🙂