5 Ways to Win on Price

It’s a scenario that’s all too familiar: You’re working to win business with a great new prospective client, and your sales prospecting courtship is off to a great start. But you’ve just started the whole discussion around price, and it’s starting to feel like the conversation is heading south. You know your prices are higher than your competitors’, but you’re not having much luck justifying it to your prospective client.

It’s no surprise that pricing is such a big decision driver in all realms of business. In fact, it may be the most important of marketing’s four P’s (the others being Product, Promotion and Place). But rather than hiding behind your pricing, here are five ways to turn pricing into a positive lever to help you win business:

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1. Focus on Value

Value = Benefit/Price. Rather than focus on the actual price point like most businesses do, expand the pie. Focus on emphasizing the benefits of your product or service and ultimately demonstrate the value you’ll be creating for your customer.

2. Connect the Dots to Dollars and Cents

Value isn’t a fuzzy thing – it’s measured in dollars and cents. Each feature you provide ought to either increase revenue or decrease costs for your customer. So rattling off a list of features your product or service offers isn’t going to resonate with your prospect. Instead, you need to connect the dots between features, benefits and value in dollars and cents. For example, if a feature you offer is complementary logo design services, the benefit to your customer is that they will save six hours of time instead of doing it themselves, which might be worth 6 hours multiplied by $50/hour in average designer wage = $300 of value.

3. Get the Pricing Metric Right

A good pricing metric should track with the value delivered and should be easy to measure. For example, your software product might be better priced based on hours of usage vs. a fixed price per seat. A pharmaceutical example would be pricing treatment medication per minute of therapy vs. pricing per volume of medication (since administering to children may be higher value and higher cost).

4. Tier Your Offerings

A one-size-fits-all approach doesn’t work well in marketing. It also doesn’t work well in pricing. Your customers have different needs, so give them different options. For example, offer an entry-level option that comes with limited support, online ordering only and shorter net payment terms.

5. Build Fences

Your different customer segments perceive value differently. Tiering your offerings using variations will naturally fence off your customer segments. For example, airlines fence off business travelers through the Saturday-night-stay requirement (and charge them a higher price).

Pricing is much more than setting a single price point. Think about pricing in a strategic way, and you’ll be on your way to winning more business and increasing your profits.


Gary Gebenlian Gary Gebenlian is VP of Marketing at FutureSimple and he has a passion for helping small businesses grow. FutureSimple designed PipeJump, a simple and intuitive software solution to help small businesses manage their sales and contacts.

9 Reactions
  1. Great article. I love the idea of selling the value metric vs. a strict price point. At CFO Xchange we have literally built our pricing structure on the flexible value basis you spoke of.

  2. It takes a truly great salesman to focus a customer on value instead of the price, but that is how great client relationships start. Also, don’t forget that price can also be a signal of quality. Being higher priced (if you’re truly better) can let a customer know that you’re serious about what you do and you provide a quality product.

  3. Jon, thanks and glad to hear that value-based selling is working well for you!

    Robert, great point about the quality-signalling effect..

  4. This makes sense for your initial pricing/discounting/etc. though I think many smaller businesses struggle to absorb rising costs. Cost management and supplier relationship management are also critical components of a company’s pricing model:

    Thank you.

  5. Our market is so competitive to the bottom of the profit line that our suppliers are experiencing a drastic dip in their profits as well. When Contractors in the field stop polluting the marketplace, everyone will make a profit. Fortunately, we’re all watching the fireworks fizzle out one at a time.

  6. Gary, I love this point–“Value isn’t a fuzzy thing – it’s measured in dollars and cents.” If we can measure it, we can make more informed decisions about it.

    Thanks for the quick reminder.

  7. I’ve found that by even costing a bit more then my competition, I still get the business. It’s all about value add and being there when they need it. I show the customers how to maximize their dollars by using our product and service and I hand deliver when I can so that I can create that face to face relationship.