Why is Pricing Strategy the Sales Training Gap that Leaders Ignore?

In 2011, we surveyed and interviewed over 12,000 sales people about sales training. When we asked what area of the sales process reps wanted help with, 4 out of 5 answered “Pricing/Justifying Costs/ROI for our product/service”.  Sales people are uncomfortable having the pricing discussion. And leadership is letting them down by not developing their skills.

The impact on the sales force is stalled deals. Sales cycles get extended. Reps pester customers. Managers pester reps. VPs of Sales pester Managers. Everybody is staring at the forecast keeping score. The best sales leaders have changed the game with pricing by involving the key stakeholders (internal and external) early in the sales process. The best leaders use the following 3 steps to solve the Sales Training Gap in Pricing.

#1 - Exit Criteria—does your sales process have exit criteria? Exit Criteria is observable customer behavior that signals the buyer has progressed to the next stage..

Why does this matter—Sales people throw price out too early. Most times customers ask for a number because they have been conditioned to do so by other bad sales people. Unless a customer has clearly articulated all of their problem solving options and ranked them, you cannot discuss price. Why? Because you will have no ability to put a thoughtful proposal together that is focused on what matters to The Customer.

#2 - Collaboration—does your sales process have a step for collaboration with the customer on pricing?

Why does this matter—Budget—is this a replacement spend or new spend? If new, where will the money come from? They will have to create budget and it is your job to show them a believable revenue lift (longer term) or a tangible cost savings (short term). If your solution does not grow revenue or reduce cost In the Eyes of the Customer, you are done. If they don’t have some overwhelming compelling event that is creating urgency for you, the lack of value is the reason for the stall. That is a fact.

#3 - Internal Approvals—does your sales process have a fluid, easy process to get pricing for a customer?

Why does this matter—We see too many companies where non customer facing stakeholders (finance, procurement, legal) are making customer facing decisions without any customer facing knowledge. If this is happening don’t blame them. Blame sales leadership. It is the job of the sales leaders to ensure back office process is smooth and there is trust. Take these people out on some sales calls. Expose them to what it means to get a customer. Show them your customer acquisition cost.

Call To Action -

Make the investment in the 3 stakeholders. Your ability to help your reps, your customers and your company understand pricing is a valuable exercise. The talent management activities above can generate a nice Q1 ROI in a short period of time. If you are looking for ways to execute this flawlessly call my friend John Deris SVP of National Accounts at Ryder or my friend Rick Cibos, Group Director of National Accounts at Ryder. These guys are two of the best.

What tactics have you deployed to manage the pricing discussion internally and externally?

Source: Sales Force Effectiveness Blog on Linkedin (Posted by Matt Sharrers on Fri, Jan 20, 2012)

EPP is pleased to announce a new partnership with Simon-Kucher & Partners

The European Pricing Platform (EPP) is proud to announce that they have added Simon-Kucher & Partners, a global consulting firm specializing in pricing and marketing strategy, to their partners. Simon-Kucher & Partners’ experience builds on over 2000 projects conducted by their pricing experts in the last three years alone. Simon-Kucher will become a new Pricing Expert Partner, exhibitor, and sponsor of upcoming EPP events throughout Europe. Simon-Kucher will offer EPP participants insights, benchmarks, proven tools and methodologies to illustrate how to maximize profitability through cutting-edge marketing and pricing strategies.

“The Global Pricing Study that surveyed more than 3,900 high-level decision makers from all major service and manufacturing industries about their profit culture indicated that 65 percent of companies are not able to charge the prices they deserve for the value their products and services deliver. As a result, they lose 25 percent of profits. Rather than focusing on profit, 46 percent of the companies fight price wars to gain volume and market share. And when companies finally bring themselves to raise prices, they only get half of what they planned,” explains Danilo Zatta, Partner at Simon-Kucher & Partner. “Partnering with EPP puts us in a position to address existing pricing practices even better and to show how the challenges identified in the Global Pricing Study 2011 can be solved.”

Simon-Kucher & Partners supports and partners with clients in the elusive and yet attainable hunt for sustainable business growth through profit margin improvement. A comprehensive and well-executed marketing and pricing strategy can result in critical profit gains and, ultimately, business survival during difficult times. With 23 offices in 17 countries and over 570 professionals, the company has been defined as the world’s leading pricing consultancy by both BusinessWeek and The Economist. Simon-Kucher & Partners has served more than 100 of the Global Fortune 500 companies. Clients come from all major industries and are often leaders in their markets.

“Simon-Kucher has been carefully selected to join our group of pricing experts worldwide because of their proven track record, experience, and pricing science methodologies,” says Pol Vanaerde, EPP president. “We are pleased to have Simon-Kucher & Partners included on our expert list and look forward to working closely with them to better serve our participants.”

EPP serves as the first ‘not-for-profit’ network for cross-industrial pricing and profit optimization decision makers in Europe. Through various on and offline media, EPP is dedicated to developing and sharing pricing best practices, effective tools, methodologies and technological solutions that help to successfully define and implement strategic pricing. Through various on- and offline media, EPP is dedicated to develop and share pricing best practices, effective tools, methodologies and populate technological solutions assisting in successful definition and implementation of Strategic Pricing.

About Simon-Kucher & Partners Strategy & Marketing Consultants

Simon-Kucher & Partners is a global consulting firm specializing in strategy, marketing, pricing and sales. Founded in 1985, the company focuses on Smart Profit Growth^SM by helping clients to boost their top line instead of cutting costs. With over 570 professionals in 23 offices worldwide, the practice is built on evidence-based, practical strategies for profit improvement. Simon-Kucher & Partners is regarded as the world's leading pricing advisor and thought leader.

About European Pricing Platform

The EPP offers your company to have the right pricing tactics in place to guarantee customer loyalty and deliver sustained margin growth to your business. Enhance your pricing know-how and be successful in it by joining this dynamic and yet resourceful pricing platform.The EPP helps your company find the right pricing tactics to guarantee customer loyalty and generate sustainable margin growth for your business. Enhance your pricing know-how and be successful in it by joining this dynamic and resourceful pricing platform.

EPP is proud to announce The Pricing Thesis Award 2011 - 2012

European Best Pricing Master Thesis Award

-     Weak pricing cuts profits by 25 percent, global study reveals that not everyone gets what they deserve  -

                                          November 2011

The European Pricing Platform (EPP) reaches in the academic year 2011-2012 a new ‘European Best Pricing Master Thesis Award’ out to the writer of the best thesis that addresses pricing as the main theme. An experienced jury of pricing experts decides eventually who the winner will be and shall be announced on an ePP event in Autumn 2012.

In Europe experienced pricing professionals are still scarce. Only few organisations have pricing managers today. A global pricing survey with more than 3.900 respondents by global strategy and marketing consultancy Simon-Kucher & Partners  reveals that 65 percent of companies are not able to charge the prices they deserve for the value their products and services deliver. Rather than focusing on profit, 46 percent of the companies fight price wars to gain volume and market share. And when companies finally bring themselves to raises prices, they only get half of what planned. As the need for more talent will seriously increase, students who focus on the pricing subject might be one step ahead of others at the moment they enter the career market. 

The importance of pricing knowledge development at student level - and herewith stimulate a new generation of professionals starting their careers with fundamental and applied knowledge in the pricing area - is the driver behind the European Best Pricing Master Thesis Award.

The winning student will receive an astonishing cash reward, an ePP Pricing Training of choice, and a bundle of pricing books. Any student graduated from a European University or Business School at Master level may enter the competition.

The Pricing Thesis Award 2011 - 2012 is made possible by our sponsors. Interested to become a sponsor of this award or to join the jury, please contact joyce.verfaillie@pricingplatform.eu

Are you currently writing a pricing thesis or do you know somebody? Do not hesitate to contact me directly or complete the application form: http://www.pricingplatform.eu/site/public/thesis_award.asp

The European Pricing Platform (ePP) is the first - independent - European platform focused to support pricing decision makers in a wide variety of industries and sectors.

Sponsors:

Pricing pressures is one of the main concerns for EU companies!

In today’s global economy, organizations are facing unprecedented pricing pressures as they deal with volatility in the commodities markets, currency fluctuations and unyielding international competition. To help mitigate the challenges, a number of world-class companies are turning to pricing software recommended by organizations from McKinsey, to Gartner and KPMG. In fact, both McKinsey and Gartner indicate that raising prices by 1-2% reaps margin increases up to nine percent.

A recent survey by audit, tax and advisory services firm KPMG reflects these findings. In its annual survey of manufacturing executives from global companies, almost 80 percent of respondents indicate they are cautiously optimistic about prospects for growth in the next 12 to 24 months. Almost half of the survey participants believe that price volatility in raw materials and inputs remains the biggest challenge, followed by increased competition, pricing pressure and uncertain demand. EU companies in the survey noted that pricing and competition were at the forefront of their concerns.

To better manage volatility, KPMG respondents indicate they are reshaping their pricing models, with pricing identified as one of the key strategies.

“With recent strike action linked to demands for salary increases above inflation, increases in the price of electricity and other infrastructure, tolls and the slowdown in manufacturing output, this has put severe pressure on company’s margins,” said Gavin Maile, KPMG’s Africa Head of Diversified Industries. “Pricing is a powerful and proven strategy for improving top-line growth and profitability, yet few organizations know how to do pricing well.”

“As organizations navigate the challenges of raw materials and currency volatility, pricing remains at the forefront for many companies as they evaluate new opportunities to increase margins, market share and business agility,” said PROS Europe General Manager Wagner Williams. “The ePP’s Manufacturing PricingFuel Day will provide organizations with a fresh perspective on the power of prescriptive pricing with success stories that uncover its strategic value.”

The European Pricing Platform (ePP) will host its Manufacturing PricingFuel day on Oct. 27 at the Sheraton Munchen Airport Hotel. This event will illuminate how innovative manufacturers can integrate pricing and product strategies to achieve exceptional growth and profitability in this changing environment. An unparalleled group of speakers from some of Europe’s most prestigious organizations will participate: Merck, Novozymes, Schindler Deutschland GmbH, Armacell European Sales GmbH, Spenncon AS, PROS Pricing and Deloitte.

Practical information

Venue : SHERATON MÜNCHEN AIRPORT HOTEL

Date : 27 October 2011, 9.00h. - 17.30h.

Language : English, GermanFurther information or registration: Britt Dejager:  +32 (0) 51 320 372 

Rate : € 595,00 for full day attendance (inclusive 6-month free participation to the Pricing Platform), second person can register for € 495,00. Bulk rates for groups are also available.

britt.dejager@pricingplatform.eu
Website for information : http://www.pricingplatform.eu/site/public/pricingfuel_days_detail.asp?id=7

Pricing of the Apple iPhone 4S

Apple iPhone 4S pricing designed to widen its appeal

Apple concentrates on price rather than innovation to widen customer base; Samsung and HTC premium phones likely gain advantage, but lower prices put pressure on Nokia and RIM, say analysts

Apple’s strategy with the newly unveiled iPhone 4S is all about selling more phones. Rather than putting an innovative but more expensive device in the hands of a smaller audience, it has opted to target the mid-tier consumer and widen its customer base.

The move is being seen as Apple’s attempt to grow its market share in the face of the Android onslaught spearheaded by Samsung, HTC and others.

Apple’s is ranging the iPhone 3GS free on a two-year contract, while the iPhone 4 model will be cut to just the 8GG version, priced at $99. The iPhone 4S 16GB will cost $199, the 32GB $299 and the 64Gb will cost $399.

Francisco Jeronimo, research manager, European mobile devices at analyst IDC, said: ‘Despite the upgrades and the new iPhone 4S released, the announcement is all about price positioning. The new prices announced to the new iPhone 4S and previous iPhone versions allow Apple to compete in the price segments where Android is fiercely growing, the mid-range.

‘Apple will attract first-time smartphone users and users from mid-price Symbian devices looking for an upgrade, but will it attract current iPhone users to replace their current iPhones? Definitely not!

Jeronimo believes this will provide an opportunity for Samsung and HTC’s premium handsets to increase their market share as iPhone 4 users look for an alternative.

‘The Samsung Galaxy S II has been a major hit around the world and a serious competitor to the iPhone. HTC has also been increasing market share in the high-end segment,’ said Jeronimo. ‘Without a significant hardware differentiation there's no strong incentive for a massive replacement, as users can just upgrade their iPhone 4's with the new iOS 5.’

Jeronimo pointed out that Apple will be ‘better positioned to compete in the mid-range segments and increase its presence in the emerging markets, where price is still a major factor on the purchasing decision’.

He went on to say that Nokia and Research in Motion should be the most threatened phone makers. ‘If price was an inhibitor for consumers to move from their Symbian or BlackBerry based devices to the iPhone, now they have the change. Today Apple entered the mass market game, hopefully not leaving the innovation and coolness to their competitors.’

Editor: James Atkinson 

Source: http://www.mobiletoday.co.uk/News