Tips to have better pricing conversations -
During pricing calls How do you convince someone that your pricing is the right one?
A few would suggest telling them the reason why your product is superior than the alternatives...
Unfortunately, that will only get you only so far.
Below are two strategies that can help you improve the effectiveness of your pricing calls within B2B SaaS environments where both Sales Development Representatives (SDR) and Account Executives (AE) are engaged in the sales process. We'll get right to it...
Value Coaching
Pricing negotiations are bound to be unsuccessful if there's the need to differentiate between the things you and your potential customers think is worth their time. While it's tempting (and in fact, more flexible) to rehash the corporate Value propositions and other talking points, this will likely leave a disconnect between you and your prospective customer. There are times when it's just semantics. it's important to comprehend your customer's business. It is then possible to define your service or product around what's valuable to their business.
This is the process I refer to as value coaching. It's a tricky concept but starts with listening and understanding instead of doing the talking. There are two common ways to start understanding what prospective customers perceive as worth:
1) Effective discovery with an ongoing dialog.
Try asking your prospect the following the following questions:
- You mentioned your sales team uses (TOOL X). Which component of this solution do you use the most with your staff? What is your approach to this issue in the present? Do you use any tools or are you accountable to it?
Check out this quote from Scott Sambucci, Founder of SalesQualia:
"Price is a measure of customer perceived value. If a customer balks at price, they're saying that you have not yet communicated the perception of worth that is required to justify the expenditure ."
Sales representatives often do not understand the stack of their prospects and often quote too soon. Asking these probing questions about what the prospects' perception of the value of their current product will allow you to find out how your product can fit into it and then communicate that value to them.
Before entering prices, make sure you identify the similar tools that they are using. Then you can alter your research to focus on the value those tools bring to them and address the area in between.
For example, your prospect might see value in the amount of time they use a service. They'll say their team uses HubSpot at least five hours per day, which makes HubSpot a good choice for them to invest in their business.
If your product isn't one that demands the user stay for a whole day in it, you need to explain to them why it brings worth even though they will not use it for a long time.
Be aware that if you set the price too early, you risk them balking at the cost. Discover what value they see in, and find an opportunity to connect with their business pains and how they will consider worth (in another way, warming the salesperson a little). Sales' best responses are yes or no. If there's more than one perception of value, it's in both your and the prospect's most beneficial interest to pull away of the transaction before investing excessive resources.
2) Leverage tools that offer insight into the way your audience interacts with your content.
Effective discovery is very difficult since the majority of prospects are looking to view a demonstration or to reach the price. There are tools and strategies that can help you discover what is appealing to those who are interested.
- Uberflip: create personalized content experiences for your prospects. Their analytics tool provides an insight into what the content that your customers are consuming.
These two tactics will help to educate your potential customers on value rather than assuming what they would like and offering the wrong product.
Single Option Alternative
My second tip for having efficient price calls, is to leverage the psychological principle of the single-option-aversion.
Behavioural researcher Daniel Mochon posits that buyers are much more likely to purchase when given more than one option. He conducted an experiment where consumers were presented with two different brands that play DVDs. 32% indicated they would buy the brand they saw first while 34 percent selected the second. When the respondents were shown just one DVD player, only 9% (or 10% (depending the kind of product they saw) stated they would buy the product. This represents a 66% increase in sales by simply adding a second option for the buyer.
Even though it is selling B2B SaaS in the past, the mind approaches nearly all purchases this way.
It is my opinion that this effect only increases when you are in B2B SaaS environments.
We researched the leading SaaS companies and found that over 65% had a consumer-facing multi-tiered pricing page with a contact-us/enterprise tier without a price.
For most businesses, when someone uses the 'contact us' form that prospect's information is passed to an SDR to discover the information and later to an AE to conduct a more thorough discovery, demo, and pricing. Prospects have come to love self-serve options as they get the option of choosing a solution that suits their needs and quickly purchase and implement the system.
When they first see your pricing page on your website to the pricing proposition, potential customers can choose from a variety of options. But at the end of the process, are presented with only one choice and price to buy the product.
I'd suggest replicating the self-service purchasing experience for potential customers but keeping the price in the dark. This way you can frame your conversation as "These are a few different packages that suit our various customers, is there a particular tier or set of features/functionalities that resonates with your needs?"
Then you can use the power of's pricing guides to narrow in on the exact solution the prospect wants.
Once you have identified where the interests lie through the initial discussion, you are able to create and cost out 3 custom tiers for their needs. These come with the benefit of greater knowledge and the scientific principles of single-option aversion.
Interactive Quotes lets you create a completely custom guide to each prospect you meet to ensure they're provided with complete choice regarding prices and other features.
Additionally, you can incorporate Drift directly in your price guides. Prospects can also ask inquiries while reading the price guide rather than having to send you an email, which can delay the process. This allows you to modify the guide on the fly and gets you a step more close to closing the sale.
The Wrapping Up
Pricing calls can be difficult and awkward. For building trust with your prospects increase the speed of your sales cycle and have more effective pricing calls
- Make your discovery process more akin to the value of coaching instead of taking your prospect's perceptions as worth
- Utilize single-option aversions and self-service pricing methodologies to benefit your business
