How To Convince Sales to Love Your New Pricing Initiatives
When I started at Revenue Analytics, I wasn’t prepared for the number of times I’d be sitting on a call with a potential customer whose pricing executive or member of the C-Suite was complaining about their sales team. I kept hearing that they were “pricing things however they wanted, giving away too many discounts, and leaving money on the table.” As a sales veteran, I openly cringed on my video calls. What I’ve quickly come to learn is that the rivalry between sales and pricing teams at manufacturers is bigger than the Bears vs. the Packers or Deep Dish vs. thin crust pizza.
My goal for this article is to share with pricing leaders how their pricing and sales teams can become allies, advance pricing strategies for B2B manufacturers, and push margins and revenues even higher. I will share ideas on how to bring these teams along as your organization rolls out new pricing initiatives and increases.
Sales Teams Day in the Life
In a typical day, a sales team member balances demanding clients with the needs of their own internal organization. Clients are emailing about invoice questions or a delivery update. The sales team is trying to hit their quota and find new prospects. At the same time, internal pressures are adding up. In just one day at a former employer, I fielded calls and requests from multiple internal departments, including:
- Marketing asking me to review their latest product brochure
- Product Development requesting time with a few of my top customers to get “Voice of the Customer” feedback on the latest innovative idea
- Accounting needing help chasing down payment on an invoice
- Sales Leadership asking for my latest forecast by 5pm
- Product Management rolling out the latest product’s go-to-market strategy, including a new pricing matrix
Workdays are hectic, and a new pricing initiative for the company isn’t always going to be top of mind for sales teams.
Pricing is Emotional
While the complicated math and data science behind a pricing algorithm is as far from emotional as you can get, telling sales teams you are about to raise prices across the board is the exact opposite. The topic of pricing typically brings emotion to the conversation. Salespeople want to delight their clients and a price increase is a dreaded conversation. Plus, sales teams worry about how their earnings will be impacted when they lose clients due to increased prices.
Tips for Selling Sales
So, how do you become a sales ally and make a new pricing strategy succeed? Here are the tips I’ve found most helpful:
- Find more time in their day – Reach out to your colleagues across the organization on how to limit non-sales activities during times when you are rolling out a new pricing strategy. It may take an executive-level champion, but it will be worth it. Make February “pricing month” so you can raise pricing to the top of the sales teams To Do List.
- Give them the “why” – Once you have their attention, lead with “why.” Why is this crucial for the organization? Why is this critical for hitting both the organization’s overall goals as well as their personal sales goals? Buy-in becomes much easier when the “why” behind an action makes sense.
- Take out the FOMO – Not only is building pricing with attainable goals important for the organization, but it also helps sales teams see the art of possibility. When we design pricing, we usually start with 75% coverage - meaning 75%+ of transactions for a particular product are already happening within the new pricing guardrails. The fear of losing sales is removed once the sales team sees that the new strategy is reasonable. It also builds some good old-fashioned competition amongst their peers; if my peers have already done it, so will I.
- Make it easy – Sales teams move fast. Finding easily digestible ways to roll out new pricing strategies is critical. Can you communicate the most important points on how to sell an increase to their customers in a 1-pager? Can you use video to spice up how they hear from you? And it goes without saying: don’t overcomplicate the new strategy. A pricing matrix must be easy to find and easy to read.
- WIIFM – As salespeople, we think about what’s in it for our customer all day long. So when you think about how to present the new pricing strategy to your sales team, think of them as your customer and ask: what’s in it for them? Show them new incentives they can earn for following new pricing guidelines, like how a price increase equals more commission or gets them closer to their next financial goal. And remember, a carrot is better than a stick. Sales teams love additional incentives and a contest now and then.
Getting sales to buy in to a new pricing program isn’t easy, but it can have a hugely positive effect on growth. At Revenue Analytics we spend as much time on the math and science behind getting pricing right for our customers as we do on the change management with the sales teams. The payoffs and ROI have been tremendous.
If you're interested in hearing more about how we implement new pricing strategies for B2B manufacturers, book a time with an expert on our team today.