Follow these six best practices to optimize your pricing process and close deals faster.
Pricing conversations require patience and planning. The make-or-break moment in a sales presentation is not at the end, when you flash a number on the screen. What matters more to winning deals is the setup: how well you frame your solution’s value proposition and how you attach a dollar value to all the benefits you’ll deliver.
Then there is the setup before the setup: Building a proposal and configuring an accurate, competitive price can take weeks (or even months) of behind-the-scenes work. That internal process can go smoothly, or it can be fraught with errors, miscommunication, and unnecessary proposal revisions. This internal friction can slow down deals and keep sales reps mired in administrative tasks with less time for actual selling.
Does your sales team’s pricing process need a tune-up? Then this how-to guide is for you.
Why Pricing Is Always a Collaborative Exercise
Internal collaboration is fundamental to the pricing process. When momentum builds on a deal, it triggers a cascade of pricing questions and approvals that require input across teams: How many licenses to include? What SKUs and services should we bundle? How big of a discount? A sometimes-frantic dialogue/debate ensues around the deal desk, with the sales rep, sales manager, solution engineer, executives, and finance and legal representatives all having their say.
When that collaboration happens in a smooth and organized way, it can help sales teams to:
- Close deals faster. Reach internal consensus and quickly put a polished proposal in front of a customer.
- Maximize revenue. Ensure that you’ve configured the best price and leveraged discounts appropriately to maintain margin.
- Reduce frustration. By keeping things organized, you eliminate internal errors and miscommunication that lead to unnecessary revision cycles.
To achieve those outcomes, follow these six best practices to optimize your collaborative pricing process.
1. Make Your Process More Visible
Visibility is the key to faster and more successful collaboration on pricing. With good visibility, any internal stakeholder involved in a deal can jump into the system of record and, on their own, view its status, related documents, conversation threads, and approvals from other stakeholders. They have the context they need to provide input on a pricing strategy or approval on a discount. It doesn’t take a meeting to get everyone on the same page, and that’s a major speed advantage.
But that’s not how it usually plays out, right? Discussions on pricing take place over siloed email threads or conference calls. Then sales reps share preliminary quotes with customers using Word docs or Google spreadsheets. The sales manager may have no idea that an unapproved discount has been floated to a customer.
- Pro tip: Analyze each step of your internal pricing and proposal process through the lens of visibility. Identify areas where information is hidden or siloed and explore ways to increase team transparency, and, in turn, speed.
2. Centralize Pricing Proposals and Data
Disorganization slows down deals. Sales reps want to pull out their hair when they can’t locate the latest pricing book or they realize they sent a customer the wrong version of a proposal. Or they’ve lost track of the historical pricing data and don’t know what price they offered a customer three months ago. It happens all the time.
- Pro tip: Create a single destination for information and resources related to a deal. Start by consolidating your docs and data within your system of record, making them easy to find and reference.
3. Bring Pricing Conversations into Your CRM
Collaboration on pricing typically takes place over email threads, or worse, email + chat + text + conference calls. In other words, it’s scattered and siloed. That just doesn’t cut it anymore. A better solution is to let the conversations happen within the CRM opportunity page, or even within the pricing documents themselves. Instead of shipping a document around from person to person, let everyone come to the document. Bottom line: If you’re collaborating about pricing over email, you’re not moving at the speed of today’s business, and your customer is getting impatient.
- Pro tip: Use a CRM app or platform solution that brings communication within your system of record so you can reach pricing consensus faster and eliminate miscommunication.
4. Streamline and Standardize Your Pricing Process
A complex pricing process, with layers of approvals and hoops to jump through, can slow down a deal’s momentum. Once you’ve taken steps to improve visibility and centralize information and conversation, it’s time to re-examine your process to eliminate redundant steps, unnecessary manual efforts, and sloppy practices by individual reps.
- Pro tip: Find opportunities to standardize how pricing is developed and presented, with pricing grids, approval matrixes, workflows, or CRM-based templates for proposals or preliminary quotes.
5. Align Teams on Pricing Strategy
If your company’s sales reps continue to clash with finance or the pricing team, consider setting up a discussion to share perspectives. Sales reps may not have a deep enough knowledge of the company’s overall pricing strategy or understand the strategic use of discounts from the point of view of maintaining margins. And in turn, other teams should understand the pricing tug-of-war that sales reps go through with customers and the pressure on them to close a deal.
- Pro tip: Bring teams together for a constructive dialogue to achieve harmonious collaboration, giving everyone a clearer understanding of other teams’ pricing objectives, KPIs, and challenges.
6. Collaborate with Customers in Real Time
A tenet of modern collaborative sales is that you invite your customer into your process to help create their ideal solution. It starts with a discovery process to gather details on their needs, budget, and timeline. Building that initial proposal and pricing takes time, with lots of back-and-forth over calls and emails.
To move faster, consider providing your customer visibility into CRM-based pages and documents, the same way you provide visibility to your internal stakeholders. Not everything, of course — but selected documents like a template that you build together on solution requirements. Then your customer can view and edit it in real time, adding questions and comments or selecting their own bundle of products or services.
- Pro tip: In the spirit of building trust, empower your customers by giving them greater access and customizations. But remember the basics: Never lead with price before first conveying value and benefits, and if any documents have internal, company-centric language, be sure to translate them into a customer-focused narrative.
Learn more about collaborative pricing proposals at www.quip.com/templates/pricing-proposal.