Author: Joel Reed



The Mereo Revenue Performance Accelerators Series: Inspire Your Sales Professionals to Serve as Trusted Advisors

July 11, 2024
Joel Reed

In today’s competitive marketplace, successful selling is predicated on becoming a trusted advisor to the buyer, fostering relationships based on trust, credibility and a deep understanding of the buyers’ needs, pains and desires. Embracing this approach transforms the process into a collaborative partnership between the buyer and the seller, where the seller is not just a vendor but a reliable ally in the buyers’ success.

GAIN BUYERS’ TRUST AND CREATE A WIN-WIN SITUATION

Why does this matter to the buyer? In a complex and highly-dynamic environment, having a trusted advisor comforts and reassures the buyer that they receive not just a product but a valuable and comprehensive solution that is tailored to their organization’s unique needs and challenges. Trust minimizes the perceived risks associated with solution adoption, enhances the likelihood of successful value realization, and provides the much-needed confidence to navigate the evolving market landscape.

Why does this matter to you, the seller? Being a trusted advisor elevates you from a transactional role to that of a strategic collaborator and partner. This status is essential for establishing and nurturing long-term relationships and customer retention, and maximizing potential for up-selling additional value. A trusted advisor is uniquely qualified to more-effectively navigate tricky objections, influence the buying committee and key decision-makers, and position the solutions (and solution provider) as an essential asset to the buyer’s ongoing success.

How does it improve your chance of winning? Trust is a decisive factor in the decision-making process for all buyers. According to Salesforce (State of Sales Report), 88% of B2B buyers purchase only when they see the seller as a trusted advisor. Why might that be the case? Because buyers are more likely to choose a solution from a provider they trust — even if it comes at a premium. Building trust also leads to positive word-of-mouth, referrals and testimonials, further enhancing the seller’s reputation. This in turn triggers more value-oriented conversations, which attracts more opportunities and increases overall win rate.

KNOW WHAT IT TAKES TO BECOME A TRUSTED ADVISOR

Becoming a trusted advisor in the competitive sales landscape requires a strategic combination of diligent research, tailored content delivery, active listening, relationship-building and a relentless focus on providing value. By embodying these principles, you position yourself and your organization as indispensable partners in the success of your buyers.

Get our revenue performance accelerator how-to guide on becoming a trusted advisor today and share the six leading practices for fostering trust with your sales force.

Becoming a trusted advisor is just one part of the greater whole. Your sales force needs the right skills and behaviors for each of the 10 critical steps in the sales process to lead your buyers to a deal.

EARLY STAGE

  1. Prospecting power moves
  2. Resisting the itch to pitch
  3. Leading their meetings
  4. Performing the quest of discovery

MID-STAGE

  1. Becoming a trusted advisor
  2. Maintaining control of the buying journey
  3. Avoiding being single-threaded with buyers

LATE STAGE

  1. Reframing objections
  2. Managing radio silence
  3. Going beyond budget constraints

Reach out to our experts to learn how we can help boost your sales team’s skills and accelerate your revenue performance.

GET STARTED



The Mereo Revenue Performance Accelerators Series: Help Your Sales Professionals Perform the Quest of Discovery

June 6, 2024
Joel Reed

Effective selling requires sales teams to clearly understand the current and desired state of a buyer’s business: What are the key problems holding them back from reaching their desired state, and what is the impact of such — including business, financial and personal (or emotional) — challenges?

Helping buyers solve those problems is where you, the seller, bring the value that resonates with your buyer and for which they are willing to pay. Without a comprehensive view, developing a differentiated strategy aligned with the buyer’s pains is impossible. No problems to solve, no value to deliver, no sale. That’s not just value-oriented selling — it is selling. Furthermore, the perceptions and causes of issues tend to vary, based on people’s role in the organization.

GO ON A QUEST OF DISCOVERY TO MAP YOUR PATH TO TRUSTED ADVISOR

Why does this matter to the buyer? Often, buyers have not considered the issues they face in full now or the impact they have on the business or themselves — the pain points. They do not have the context for a future state and the benefits it could bring. Effective discovery helps the buyers better define their current situation and its impact on them, as well as their organization and the business as a whole as a precursor for mapping the value of moving to an enhanced future state.

Why does this matter to you, the seller? Acquiring solutions (e.g., software, hardware and / or related services) is a risky and often confusing situation for the buyer. Without a clear understanding of the pains their current situation presents and the benefit of addressing them, they are unlikely to extend the personal and organizational resources to solve them — “no pain, no gain.” They are unwilling to take personal risks unless the likely upside is substantially worth it.

How does it improve your chance of winning? As a knowledgeable partner, guiding the buyer through an effective discovery process — helping them identify issues, understand the impact of them and the value derived by solving those issues — is fundamental to mapping out the story or vision that will energize decision-makers to move away from the status quo. By doing so, you can build a relationship as a trusted advisor.

KNOW THE VALUE YOU OFFER A BUYER BEFORE PROPOSING YOUR SOLUTION

Only when you fully understand the buyer’s current state — the problems, the impact and root cause of those problems, and the buyer’s desired future state — are you in a place to effectively position the value you can bring and even consider proposing your solution.

Get our revenue performance accelerator how-to cheat-sheet for performing the quest of discovery today and share the 8 leading practices for buyer discovery with your sales force.

The quest of discovery is just one part of the greater whole. Your sales force needs the right skills and behaviors for each of the 10 critical steps in the sales process to lead your buyers to a deal.

EARLY STAGE

  1. Prospecting power moves
  2. Resisting the itch to pitch
  3. Leading their meetings
  4. Performing the quest of discovery

MID-STAGE

  1. Becoming a trusted advisor
  2. Maintaining control of the buying journey
  3. Avoiding being single-threaded with buyers

LATE STAGE

  1. Reframing objections
  2. Managing radio silence
  3. Going beyond budget constraints

Reach out to our experts to learn how we can help boost your sales team’s skills and accelerate your revenue performance.

GET STARTED



The Mereo Revenue Performance Accelerators Series: BE THE BOSS OF YOUR SALES MEETINGS

May 9, 2024
Joel Reed

Bossing your meetings is about establishing control and direction in every sales engagement between you and the buyer. Too often, sellers enter meetings underprepared, resulting in an understated conversation that undermines the intended progress and outcomes.

TAKE THE LEAD ON EVERY SALES MEETING

Why does this matter to the buyer? 81% of sales professionals say buyers complete research before they connect, according to a CRM system vendor analysis. Today’s buyer values well-organized meetings because they show professionalism and consideration for their time, and result in meaningful outcomes. Efficient decision-making, self-assurance in the seller’s skills, and successful collaborations are all facilitated by well-structured agendas and conversations that guarantee the buyer’s interests are met.

Why does this matter to you, the seller? 87% of buyers want sales professionals to act as trusted advisors. For the seller, organized meetings are important in this context as they demonstrate their expertise, build trust, foster trust, and instill confidence in the seller and the solutions they represent. Structured meetings also help achieve greater business outcomes by fostering clear communication — increasing awareness of the buyer’s real issues and achieving a higher possibility of successful agreements by respecting the buyer’s time and demands.

How does it improve your chance of winning? Over 75% of opportunities stall because of a failure to successfully conduct sales meetings. Mastering their structure and execution provides you with the best platform to progress your opportunities with tangible outcomes and next steps.

TAKE YOUR MEETINGS FROM CHAOS TO CONTROL IN 10 STEPS

Lean the 10 steps for bossing sales meeting in our revenue performance accelerator how-to cheat-sheet.

Bossing your meetings is just one part of the greater whole. Your sales force needs the right skills and behaviors for each of the 10 critical steps in the sales process to lead your buyers to a deal.

EARLY STAGE

  1. Prospecting power moves
  2. Resisting the itch to pitch
  3. Bossing your meetings
  4. Performing the quest of discovery

MID-STAGE

  1. Becoming a trusted advisor
  2. Maintaining control of the buying journey
  3. Avoiding being single-threaded with buyers

LATE STAGE

  1. Reframing objections
  2. Managing radio silence
  3. Going beyond budget constraints

Reach out to our experts to learn how we can help boost your sales team’s skills and accelerate your revenue performance.

GET STARTED



The Mereo Revenue Performance Accelerators Series: Urge Your Sales Professionals to Resist the Itch to Pitch

April 4, 2024
Joel Reed

Sellers often wrongly offer value propositions to buyers as a way to articulate what they are selling and why the buyer should purchase their product and / or service. The problem? Too many of those value propositions lack any actual value. They solely push a “proposition” communicating more about the offering and very little (if any) about what unique outcomes the product and / or service delivers to the buyer as a means of addressing a current challenge(s) the buyer is facing. A value proposition without value is simply a proposition, and often a failed one at that.

WHEN YOUR SALESPEOPLE RESIST THE ITCH TO PITCH — THEY EARN THE RIGHT TO SERVE

Why does this matter to the buyer? In a recent study, Forrester asked B2B buyers about their view of sellers. The results were not flattering. B2B buyers believe only 8% of sellers are focused on driving a “valuable” end result for the buyer. And that is what buyers desire from their engagement with sellers — value. Unfortunately, buyers view 92% of sellers as not looking out for them. Instead, sellers keep their own best interests in mind. Buyers want the essence of the conversation to be about them — what they are struggling with, what they want to accomplish and the path to get there.

Why does this matter to you, the seller? A DemandGen report found 56% of all buyers rate their experience as “less than satisfied.” Happy buyers take actions and often purchase more over time. Sellers who excel are primarily motivated by serving buyers, which starts with a deep understanding of their problems, the impact on their business and desires, and then offering a vision for a better outcome or desired state (the “value” of your solution). Sales Mastery asked buyers about the top “deal-makers” and “deal-breakers.” Each of the top 10 deal-makers is grounded in the buyer (for example, “my needs,” “return on investment (ROI) for me,” “listened to me”), while the top deal-breakers accentuate sellers who are selfish (versus selfless).

How does it improve your chance of winning? Sellers who rank themselves No. 1 — ahead of buyers — have a short lifespan. LinkedIn surveyed over 7,500 B2B buyers worldwide, highlighting an alarming disconnect. Almost two-thirds (65%) of sellers said they “always” put the buyer first. But when LinkedIn asked buyers, less than a quarter (23%) agreed — quite a contrast.

Great sellers put the buyer first, act as trusted advisors, and perform discovery until they have a deep and complete understanding of the unique problems and impact of those in the prospect’s current state. Only then do they propose a tailored solution to take the prospect to the desired state where their problems are uniquely solved, and they can reach their business objectives. This is the value you bring.

RESIST JUMPING TO THE SALES PITCH — AND SEEK TO SERVE™

Empower your teams to earn the right to pitch after thorough discovery and by mastering the opportunity. Get our revenue performance accelerator how-to cheat-sheet for resisting the itch to pitch today for the key principles and techniques your sales force needs to succeed.

DOWNLOAD THE REVENUE ACCELERATOR

The sales pitch is just one part of the greater whole. Your sales force needs the right skills and behaviors for the 10 critical steps in the sales process to work.

EARLY STAGE

  1. Prospecting power moves
  2. Resisting the itch to pitch
  3. Leading their meetings
  4. Performing the quest of discovery

MID-STAGE

  1. Becoming a trusted advisor
  2. Maintaining control of the buying journey
  3. Avoiding being single-threaded with buyers

LATE STAGE

  1. Reframing objections
  2. Managing radio silence
  3. Going beyond budget constraints

Reach out to our experts to learn how we can help boost your sales team’s skills and accelerate your revenue performance.

GET STARTED



The Mereo Revenue Performance Accelerators Series: BOOST THOSE PROSPECTING POWER APPROACHES

March 7, 2024
Joel Reed

At the start of the buying journey, your organization remains a solution threatening to get lost among a growing field of competitive options. It is up to your sellers to capture buyer attention and build interest while establishing a foundation of value for the prospect. Empower your sales force with vital prospecting power approaches to effectively engage prospects and build quality pipeline — and contribute to sustainable revenue performance.

THE RIGHT PROSPECT POWER APPROACHES CAN SERVE YOUR BUYER, YOUR TEAM AND YOUR ORGANIZATION

Why does this matter to the buyer? Research from a CRM provider is showing that a greater number of buyers now prefer digital interactions as compared to face-to-face meetings. In fact, this shift is likely driving an increase in C-Suite participation in initial meetings which has grown by 108% per Chorus.ai. research. These changes in the initial buying cycle have caused sellers to reassess how they can best serve buyers in prospecting and how they can do so as effectively as possible. On one hand, securing the first meeting can be easier through the convenience of digital tools. On the other hand, competition has risen in a digital world. This means it is more important than ever for sellers to connect with prospects as effectively and impactfully as possible.

Why does this matter to you, the seller? It is your job to sell! And prospecting is the foundation of sales. Yet a recent Forrester Research survey revealed that only 8% of buyers believe sellers put the buyer’s interests ahead of their own. And what buyer would opt for a seller who is not looking out for their best interests? To counter that perception, sellers need to embrace a value-driven framework in their prospecting approach to significantly advance the journey toward a sustainable and efficient prospect strategy.

How does it improve your chance of winning? Prospecting effectively increases the chances of success. When done right, prospect power approaches promote meaningful interactions, comprehension of client needs and personalization of solutions. At the heart of this stage in buying and selling, quality prospecting fosters relationships — allowing salespeople to present value-aligned offers and boosting the likelihood of creating quality opportunities.

LEARN THE PROSPECT POWER APPROACHES TO ACCELERATE YOUR REVENUE PERFORMANCE

Your sales force needs the right skills and behaviors for the 10 critical steps in the sales process to work. Reach out to our experts to learn how we can help boost your sales team’s skills and accelerate your revenue performance.

EARLY STAGE

  1. Prospecting power moves
  2. Resisting the itch to pitch
  3. Leading their meetings
  4. Performing the quest of discovery

MID-STAGE

  1. Becoming a trusted advisor
  2. Maintaining control of the buying journey
  3. Avoiding being single-threaded with buyers

LATE STAGE

  1. Reframing objections
  2. Managing radio silence
  3. Going beyond budget constraints

Empower your teams to prospect as effectively as possible. Get our revenue performance accelerator how-to cheat-sheet for prospect power approaches today for the key principles and techniques your sales force needs to know.



Your Sales Process Is Not Enough

February 15, 2024
Joel Reed

Leadership at a global FinTech software services company spent part of 2023 formalizing their sales processes in a sales motion guide. Their value selling approach aligned with their target buyers’ journey. Their processes were thorough and solid. We know this because our experts at Mereo had the good fortune of supporting this important effort.

Yet these leaders astutely realized that the sales process on its own is not enough. Instead, they dug deeper: How can we broadcast this process to our entire organization and get their attention? How can we ensure our sales force truly internalizes this approach? How do we know our people are capable of seeing the process through?

Good organizations guide their teams with a unifying sales process and supporting methodology. Leading organizations take sales processes a step further — focusing on individual skills and behaviors comprising the whole process. They train their sales force on not just skills but help them embrace new behaviors and a unifying mindset. They make their sales process not a step-by-step activity but the foundation for the sales organization’s culture. How? We want to share this secret-sauce to successful selling with you.

ELEVATE COLLECTIVE SELLING SUCCESS THROUGH INDIVIDUAL PERFORMANCE DRIVERS

The modern B2B buying journey requires a high level of sophistication in selling. Organizations must comprehend who their ideal client profile (ICP) — in other words, who their buyers are. They need to lead with a cohesive, compelling effort to prospect and engage qualified buyers across all departments and geographies. They are required to know the marketplace — even better than their buyers — and offer insights based on that knowledge. They must close and follow through with tenacity and care.

Your sales force needs the right skills and behaviors for these 10 critical sales methodology steps across the sales process to work. Think of these as a critical subset of revenue performance accelerators that align with the selling cycle, and can improve individual execution and group revenue performance:

Early Stages

  1. Prospecting power moves
  2. Resisting the itch to pitch
  3. Leading their meetings
  4. Performing the quest of discovery

Middle Stages

  1. Becoming a trusted advisor
  2. Maintaining control of the buying journey
  3. Avoiding being single-threaded with buyers

Late Stages

  1. Reframing objections
  2. Managing radio silence
  3. Going beyond budget constraints

In the coming months, we will provide you the tools for each stage of the selling process to train and enable your teams to succeed. Follow us on LinkedIn, and do not miss these game-changing tools.

3 SELLING BOOKS TO BOOST THE GROWTH OF YOUR SALES FORCE

In the meantime, assign your teams these reading materials to kick-start their growth and understanding.

  1. Blue Ocean Strategy by W Chan Kim and Renée Mauborgne
    Embrace this game-changing strategic approach and learn how to tap into new market spaces ripe for growth. Get it here.
  2. The 5 Paths to Persuasion by Robert Miller
    Tailor your presentations to the mindset of your decision makers. Learn the five distinct categories and how best to engage them. Get it here.
  3. The Challenger Sale by Matt Dixon and Brent Adamson
    Inspire your sales force to become effective “challengers” in their buyer-seller relationships. Get it here.

LEAD AN UNSTOPPABLE SALES FORCE

Our experts at Mereo have supported leading B2B organizations in both formalizing sales processes that work — and training and enabling teams with the methods and skills to see these processes through. Reach out if your organization could benefit from outside guidance.

 

LET’S TALK SALES METHODOLOGY



IS IT TIME TO RENOVATE YOUR GO-TO-MARKET ORGANIZATIONAL STRUCTURE?

November 16, 2023
Joel Reed

A leading global financial technology (FinTech) client recently reached out with a big request: They wanted to completely overhaul their go-to-market organizational structure, roles and relationships. Like a number of our clients, they are moving towards a stronger sales-led oriented culture, recognizing the benefit of higher growth rates across all parts of the organization.

We immediately saw the benefit of their doing so and gladly helped. A poorly-structured organization threatens your revenue potential. After all, poor and outdated organizational structures breed misalignment across departments, delayed action and performance inefficiencies. But when you fine-tune your organization to be buyer-first in focus and to align to your current business model and market environment, you set it on the road to sustainable revenue performance.

Is your organizational structure as optimized as it could be? There are a number of factors that should tip off sales and go-to-market leaders to rethink their organizational approach. Here are five key drivers we think you should pay attention to.

1) TRANSITIONING FROM A FOCUS ON THE DEAL TO REVENUE

If your organization is in the midst of pivoting from a focus on closing the deal (transaction) to ongoing revenue for the full client lifecycle, your go-to-market organizational approach will need to pivot too. This transition comes with a number of changes that will influence your structuring and your team’s roles.

Are you moving to a cloud-based solution with recurring revenue contracting models? Is your account management focused on ensuring client satisfaction and client retention? Do they understand how to identify new value opportunities to serve existing clients? How is your financial valuation affected by more-predictable revenue streams and better visibility of future revenues? Is your team still focused on professional services post-sale or on client success and onboarding to support the whole product?

2) THE GRAYING OF LINES BETWEEN SALES AND MARKETING RESPONSIBILITIES

Many sophisticated B2B organizations are seeing their sales and marketing responsibilities blurring and overlapping. This is especially true in large organizations’ field marketing and demand generation efforts — or in those practicing account-based marketing and sales.

Take a hard look at the role of your business development representatives and ask yourself: Is business development the last stage of qualifying a marketing-generated lead — or the first stage of sales outreach and prospect engagement? Do they align to a market program or a selling territory? Is a business development representative an apprentice salesperson and compensated as such, or are they simply appointment setters?

3) THE GRAYING OF LINES BETWEEN SALES AND CLIENT SUCCESS / EXPERIENCE TEAMS

Historically, many companies segregated sales teams grouping “hunters” and “farmers.” Hunters focused on acquiring new logos, while farmers worked to expand the solution footprint or wallet share in existing accounts. Recurring revenue and / or SaaS delivery models increase the focus on client retention — not just expansion.

Who owns a client? What are your client retention rates? Are the client success teams compensated on retention only or on account growth as well? Do these individuals understand how to identify new opportunities and engage the right resources to develop them?

4) LOSING THE NON-COMMISSIONED OFFICER IN SALES

The non-commissioned officer in sales used to be the staff sergeant — the first-line manager. They sat in the regional office with a sales team of six to 10 people. They were deeply engaged in accounts, coaching and training, opportunity and pipeline management, and reviews.

In the last decade or two, companies have eliminated this layer of management and consolidated upwards of 15-25 reps under a sales director. The sales director is not co-located with his or her team, has much less time for one-on-one engagement, and spends a disproportionate amount of time reporting-up versus managing and coaching down.

This shift will affect your sales effectiveness, sales technology, and training and coaching / onboarding. How often do your sales leaders participate in prospect or client meetings? How much training have they had to enhance their coaching skills? Are pipeline reviews viewed as reporting exercises or enablement opportunities? If these leaders are not coaching your sales representatives, who is?

5) NEW DISTRIBUTED NATURE OF THE SALES FORCE

As the non-commissioned officer has been removed, there is less need for small sales offices. COVID-19 further accelerated this trend. Even in Europe, where the relatively small size of the countries makes it more likely salespeople live within reach of an office to go in, COVID influenced more stay-at-home work.

Today, sales reps spend less time with managers and peers. They are now more likely to spend the majority of their time in a home office than in a traditional place of employment. This remote set-up makes the right sales systems, technology and methodology all the more important to get right.

Do you have a sales process and methodology tailored specifically to your organization, market and solution set? Does your technology actually benefit the representative as they work with a Prospect through the buying journey and selling cycle or is it simply a reporting tool? Do your sales representatives have assets and artifacts to support your methodology honed through numerous trial and error processes or is every asset produced on the fly by them? Do they have approaches that align the members of the go-to-market team for success or is each representative acting as a lone wolf?

STRUCTURED FOR SUCCESS

With an up-to-date and optimized go-to-market structure, your organization will have the foundational bones to Seek to Serve™ buyers with powerful solutions. Download the Mereo Sales Organizational Roles Guide for the most common sales structures that leading B2B organizations follow.

DOWNLOAD THE GUIDE

Reach out to our experts for a complimentary baseline evaluation of your current go-to-market structure.



3 Ways to Make Your 2024 Revenue Kickoff Engaging

November 2, 2023
Joel Reed

Your 2024 revenue kickoff (RKO) is your opportunity to prepare your teams for the future and any changes you would like to see in your organization. Yet, these programs too often are full of long slide shows and speakers who seem to drone on in monotone. Having an engaging kickoff program holds your teams’ attention and helps them retain more of what you are saying. Creating an engaging kickoff could prove to be valuable to your organization and to your teams’ growth.

1) Make Your Teams Experts on the Buyer Journey

Understanding how your buyers approach purchases can boost your chances of closing a sale and even create repeat buyers. One way to do this is by creating a trade show experience for your sellers at your RKO. In your “trade show”, display your solutions linked to the problems they solve (Value Proposition) and provide a short compelling demo. Your demos should be pithy and highlight the differentiated value capabilities of that solution. This gives your teams a deeper understanding of what your buyers see, what exactly they are selling and what value your solution offers. Creating a trade show segment allows your teams to immerse themselves and avoids the boring slideshow that lists every product and solution.

Another way to understand your buyer is to showcase interactive customer panels. The one person who knows your buyers the best is your buyers — do not be afraid to utilize that! Holding a customer panel allows you to uncover what problems they are facing and assess their competitive environment. This provides situational knowledge to your sellers enhancing their ability to effectively engage and converse with prospects and it helps your teams to understand potential buyer pains and help your organization develop solutions to those pains.

2) Give Your Teams Time to Network

Networking within teams is just as important as networking with strangers! If your teams do not know each other, how can they rely on each other? In your RKO program, set aside ample time for your teams to network with one another. This gives them the opportunity to discuss aspects of their selling strategies such as successful approaches, the resources they have (or need) and how they can lean on each other. Create formal meeting times for sales teams where they can start thinking about how they can apply what they have learned at your kickoff and develop an activation plan, and to utilize newly learned skills. They can choose a time frame to test something, set goals for this time frame and report back to each other with their results.

Another reason to implement these networking opportunities is that many of these teams are no longer co-located. This is a great opportunity for your teams to meet-up, discuss relevant topics and build relationships with one another.

3) Create Your Agenda with Your Teams at the Center

For your program, it is important to build your agenda around your teams. This can easily be done by sending around an anonymous survey before your kickoff to see where they feel confident from a skills application and solution knowledge standpoint. For example, you may ask, on a scale from one to five, how familiar everyone is with a certain product / solution. If you find that most of your teams responded with a four or five on one product / solution, do not spend a copious amount of time discussing it in your kickoff. Another example is to ask how confident they are explaining the differentiated capabilities of a product / solution. If you will likely see much lower answers on this question, then you can reinforce the differentiated value of said solution and ensure your teams can communicate that to your buyers and prospects.

Plan For Success in Your 2024 RKO

The key to having a successful and engaging kickoff is to start with a strong plan. With Mereo’s RKO Planning Playbook, you can gain access to exclusive insights from experts and plan a winning kickoff.

 

Download the Playbook for Free



Ultimate Pricing Power Part IV: THE FINAL STEPS TO A SUCCESFUL PRICING STRATEGY

May 25, 2023
Joel Reed

Previously we laid the groundwork for an effective pricing strategy, setting goals and gathering key inputs. Now it is time to take the final steps toward your ultimate pricing power.

Pricing affects external AND internal behaviors. Salespeople will quickly determine the best way to maximize their interests just like a customer or prospect will strive to minimize their cost. This has become particularly important with the drive to subscription revenue. Selling companies like the subscription pricing approach (whether or not they have a software as a service offering or leased physical product) because it creates a more predictable revenue stream. The issue becomes how your pricing model affects your sales team compensation plan. What term of subscription do you offer? What risk of renewal or inflation do you want to bear as a company? Additionally, how will you pay commissions — up front, as revenue is recognized or on what part of the subscription?

Buyers generally want to reduce inflationary risk by locking in long-term contracts with no cost of living / inflation adjustments. So as a provider you must determine the balance of risk you will bear to offset the benefit of predictable revenue streams. Let us explore all the internal and external forces that should shape your price.

Pricing Structure

What key factors will your team need to consider in the pricing decision that will impact the final calculated price? Remember, having to update your pricing strategy for current customers often results in churn. Avoid surprises and spend the time noting down all relevant impacts to your price. This might include:

  1. Unit price
  2. Embedded or associated partner products
  3. Volume discounts and cutoffs
  4. Time factors
  5. Incentives
  6. Geography
  7. Bundles or packaging
  8. Direct or resell (third-party)

Discounting Practices and Policies

Set the criteria for discounting, including discount levels, determining factors and who is allowed to authorize these decisions. Also consider how bundling and packaging can impact price discounts and adjustments. Lastly, include a plan for exception processes for things such as end-of-life of your product or any sort of market change (remember COVID?).

The Review Cycle and Roll-out

Next, build a formal foundation of your organization’s’ standard practice for a pricing review cycle. Common triggers of a pricing review cycle include:

  1. Annual review or updates
  2. Solution / product introduction
  3. New packaging or bundle introduction
  4. Product change
  5. Product end-of-life

Additionally, formalize what needs accomplished, who owns the tasks, and what systems and assets need to be created or changed for a pricing rollout.

UNLOCK YOUR ULTIMATE PRICING POWER

A B2B Leader’s Guide to Pricing Strategy Workbook provides B2B leadership with the four key pricing principles and the six steps that will lead you to a successful pricing strategy and outcomes.

 

DOWNLOAD NOW



Ultimate Pricing Power Part III: THE GROUNDWORK OF EFFECTIVE PRICING STRATEGY

May 18, 2023
Joel Reed

I recently shared the key elements that make for an effective pricing strategy and who should be leading this. Yet actually taking the steps toward creating an effective pricing strategy can be daunting.

Emotions can rear their heads and lead decisions astray. Opinions can undermine what should be a calculated, informed decision. And, most importantly, your leadership team should be able to use this strategy to replicate the process for any product updates or new solutions into the future.

I am here to show you the approach that will lead you and your team to a pricing strategy that serves your buyers, reduces future churn and supports your revenue performance. Are you ready to set the groundwork?

THE 5 GOALS OF PRICING

In order to realize success in the end, your leadership team must first identify which goal your exercise will help fulfill. Five common pricing goals include:

  1. Alignment with Financial Plans and Strategy: Defined in specific revenue targets, revenue mix, growth rates and margin targets over time.
  2. Growth: Defined in terms of revenue, market share, market penetration, units sold, and customers retained or acquired.
  3. Retention: Defined typically by revenue or customer numbers, but may also include rates by geography, industry or other market / product segment.
  4. Pull-Through or Cross-sell / Up-sell: Defined by attachment rates and cross-sell or up-sell rates.
  5. Product Selection: Targets associated with selecting one solution versus another (typically considered in replacement, end-of-life or transition strategy scenarios).

6 KEY PRICING INPUTS TO GATHER

Before any decisions start to form, your team needs the right input and data to inform them. These six pricing inputs all play a key role in the final pricing strategy. And when they are all considered and incorporated, your organization will ultimately reduce significant pricing churn into the future.

  1. Product Cost: For example fixed cost and variable cost, such as data storage, maintenance and access
  2. Competitive Environment: Such as pricing level and pricing approach
  3. Financial Strategy and Financial Plan: Like revenue mix by product segment / category (this impacts packaging and bundling considerations)
  4. Differentiated Value Proposition: Such as assessed level of differentiation in the marketplace
  5. Product Strategy and Defined Roadmap: For example growth dimension (what are the goals and tactics?) and identifying products that will pull this product into a sale or vice-a-versa
  6. Market and Environment Trends: Like regulatory and compliance drivers, as well as overall economic market trends

UNLOCK YOUR ULTIMATE PRICING POWER

A B2B Leader’s Guide to Pricing Strategy Workbook provides B2B leadership with the comprehensive four key pricing principles and detailed six steps that will lead you to a successful pricing strategy and outcomes. Download the guide for the complete framework.

 

DOWNLOAD NOW