Have you tried multiple times to rollout price increases only to find single-digit execution rates? Do leaders and sales reps justify the lack of adoption of pricing changes to fear their clients will go to competitor?

Focusing on value provided, you can implement a winning price increase, contrary to what may have been occurring historically.  Re-anchoring is the key to a winning pricing strategy – a focus area we will take on as part of developing a winning pricing strategy for mature businesses.

 

First and foremost, as CEO, you are:

 

  1. Prioritizing the right initiatives
  2. Share in the challenges you face with most well-established companies that are out there. 

     

We have found many established firms tend frame price increases around the pass through of expenses that they are experiencing.  The reality is there is value being brought to firms that far exceeds the inflationary impact – you own taking more of that to increase revenue and profitability.  Tell your story on those factors to give yourself the best chance to upsell versus passing along information that costs have risen.

 

Download the SBI Pricing Execution Guidance Tool to assess your Pricing Power against world class organizations, identify gaps and prioritize, and leverage to build a pricing execution roadmap.

 

Process to a Winning Pricing Strategy

 

 

  1. Recognize Your Position

     

    Look in the mirror and acknowledge what you are trying to do – grow revenue and margins.  Well-worn territory and one all companies, regardless of age, have goals to achieve.  We have found it to be a valuable exercise to understand why clients come to you over your competitors.  Performing client interviews, prospect win / loss calls and competitor mystery shopping are three ways we have supported an array of clients in the early stages of assessing a price increase.

     

    Acknowledge that inflation plays a part in running your company, but it should not be the primary factor to justify pricing changes.  Your ability to take 1+1 and get it to equal 5 in the eyes of your clients should be the focal point.  Your ability to bring resources together to do things faster, cheaper and better than a firm could do by 1) doing it themselves or 2) going to someone else.

     

  1. Acknowledge Your Client’s Position

     

    Clients have made the conscious decision to do business with you and prospects are investing time into building a relationship with you.  They are doing this for a reason, but they also have options.  Take the time to understand the dynamics they are facing.  This knowledge will be recognized, and it will give you a frame of reference into what is driving their decisioning.  You might even find, price does not matter for them – rather they are focused around the levels of service you are providing and would be willing to pay an increased premium for all you do.

     

    In a recent blog titled ‘Should Competitors Dominate Your Pricing Analysis? ’, we talk about how to approach a client based on the strategic position of your offering and your competitive strength.  Framing up pricing conversations based on a client’s wiliness to pay.

     

  1. Frame the Story & Train the Team

     

    Knowing is half the battle.  Now that you understand what you provide that is valuable and what your client cares about, now you can prioritize and take action.  For your client-facing reps, it is extremely important you spend adequate time educating them on the challenging discussions they are ultimately going to have.

     

    We have found making sure all areas are covered adequately is an aspect that some have not fully addressed.  They have budget for a pricing initiative, they do all this research to find data-driven facts, hand it over to sales reps and expect them to piece the components together.  Fully running through the tape and arming them with richer facts, responses, etc. than their clients will have will truly enable the successful navigation of the price increase.  Create a collaborative environment with scenario play sessions, share stories, provide the 3-7 key facts / talking points, enable emotional intelligence (EQ), etc.

     

    We have found one helpful step would be to review ‘SBI Pricing Execution Guidance Tool‘.  This starts to frame out areas to explore to help build out your story.

     

  1. Execute and Measure (with Feedback Loop)

     

    Now that you have done your research (internally and externally) and framed the story.  It is time to execute the re-anchoring of discussions around the value you provide, not the inflationary pressures on your cost structure.  Measure how conversations are going, gather success stories and compile these into internal messages to re-iterate why we are doing what we are doing and how to be successful.  Let people be vulnerable and ask for help with challenging clients.  Give them all the tools necessary to be successful.

     

Where to Go from Here – Increased Revenues and Margins

 

There is not perfect time to put price increases into action, but lack of any changes in an environment of increasing costs is not a viable option.  We have found firms that: 1) Do their internal and external research, 2)Make it easy for sales reps by framing the conversations, and 3) Support a rollout and measure their results are most effective.

 

Download the SBI Pricing Execution Guidance Tool to assess your Pricing Power against world class organizations, identify gaps and prioritize, and leverage to build a pricing execution roadmap.

 

 

Additional Content

 

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ABOUT THE AUTHOR

Doug Bartels

Securing the business to scale and grow in the most effective manner

Serve as SBI’s head of finance to enable the partners to invest more time helping our clients make your number.  My role is to support the rapid growth of SBI to maintain the quality of delivery expected of our clients by maintaining healthy bottom line while supporting our continued growth.

 

In the past, Doug functioned as a management consultant in the financial services industry serving top tier wealth management, asset management and brokerage institutions in the areas of strategy development, project management, process improvement, systems integration and risk management.

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