Prospect: “How much is it?”
Sales rep: “How much you got?”
As much as most salespeople would like to be able to respond to pricing inquiries in such a manner, the fact is that pricing discussions are always the ones in which every stakeholder plays their cards closest to the vest.
In an ideal world, we would know exactly how much any given prospect in any market has “got” and set our prices to match what’s in their pockets. But sales can be a tricky world wherein pricing is all about hedging bets and playing the averages.
It’s in setting these averages where an online sales proposal tool delivers one of its biggest bangs for the buck (fittingly, in helping you get the most bang from others’ bucks).
Good news and bad news about proposal automation and pricing
First the bad news (to be accurate, this is really more the “expected news”).
While a CPQ solution may come with preconfigured templates, colorful sales analytics dashboards, and other tools ready to use out of the box, it does not come with ideal pricing baked in.
The engine is in there — a product and pricing configuration feature — but your pricing is yours to determine. Most of us land on the ideal pricing for every product in our catalog after years in the trenches and dozens if not hundreds of proposals.
Now for the good news: your online sales proposal system is not just about empowering each rep with a more accurate way to send and track quotes — it’s about sharing information. And this means pricing information.
Because @@every quote you send is not just a business opportunity: it’s also a learning opportunity.@@
George in Georgia learns that companies in the widget business will pay 20% more for your products. He then shares this learning up the food chain and into the CPQ system. Suddenly, Alan in Alabama sees that he can increase revenue and margins by 20% should he get busy in the widget space, too. A responsive approach, which beats a reactive approach every time.
Reactionary pricing versus responsive pricing
“Did you hear? Competitor X just dropped widget prices by 20%! That means we have to drop ours right now, too! Go! Go! Go!”
Reactionary pricing is, in fact, a no, no, no.
What we’ve learned over decades of product and pricing configurations (and emailing more sales quotes than we can count) is that the best customers value stability in pricing.
This doesn’t mean you can’t change prices, but any changes you make should be proactive, a response to deeper data from customers, prospects, the field, and the overall market.
This measured approach shows you’re paying attention, and also that you know YOUR value (remember: value isn’t always just a number). A willy-nilly, knee-jerk discount sets the wrong expectation for your customers (and will likely tick them off when you have to pull it back), and positions your company as a follower rather than a leader.
How does your CPQ system figure into this particular equation? By sharing pricing information across the enterprise, by enabling a bird’s eye view of your overall pipeline, by providing the data that fuels a thoughtful response.
With these tools — all of which should be built in to your online sales proposal solution — you’ll be able to see where price is an issue and respond accordingly and purposefully.
If you'd like to learn more about this topic or see IQX for yourself with a free demo, contact us.