10 keys to handling price and optimising margin

  1. Understand your customer
    • Their business – its drivers, its KPIs, its culture and strategy, their commercial position
    • The individuals – their personal drivers, pressures, persona
  2. Help, don’t fight – work with them not against them
  3. Understand your pricing
    • How your prices are set
    • The components of your price
    • The underlying rationale and logic of your pricing strategy Impact on their business
    • The impact of price on your business
    • The impact on you as an individual – have to work harder to hit target, reduced reward, fewer resources available to help you sell
  4. Beware of giving way on price too easily.
    • You are training your customer to push for more
  5. Understand why we crumble on price
    • Want to be “The customer’s friend”
    • Fear of rejection
    • Path of least resistance
    • Sense of fairness
    • Low resilience
  6. Have confidence in your value proposition and track record
  7. Build business cases that articulate value and return on investment
  8. Differentiate between purchase price v. lifetime cost
  9. Consider the implications of “no”
    • Can your customer really walk away from you at an increased price?
    • What would it cost them to replace you?
    • What would be the impact on you and your business if you stuck to your guns and refused to move on price?
  10. Stay aware of the psychology of price as well as the best practice of price handling.


Share this: