Stop Selling Price. Start Selling Value.

Pricing sets the profitability table for a business. If you get it wrong, no amount of cost-cutting will be able to make up the difference.

I recently worked with a client who had a gross-margin problem. They were pricing to compete on cost, yet they offered a high-value solution to their market. Their costs were high and their profits were low—or nonexistent.

Competing on price is easy. Selling value takes work.

You need to understand your customer’s business, what matters to them, how they make purchasing decisions, and—most importantly—what your solution is worth to them.

That value might come from increased revenue, lower costs, reduced risk, improved productivity, better quality, faster time to market, or simply avoiding a costly problem.

If you can quantify the value, you can have a different conversation about price.

Selling value also allows you to recover the investments you’ve made in people, technology, product development, service, and support—the things that differentiate you from the lowest-cost provider.

Here are few pricing realities:

• Price communicates value. Make sure your price reflects the value you deliver.

• Value is customer-specific. What is highly valuable to one customer may not matter to another.

• Strong sales teams sell the business case—not just the product or service.

• Value can often be quantified. The more clearly you can connect your solution to dollars, time, risk, or results, the stronger your value proposition becomes.

• Don’t apologize for your price. If you deliver substantially more value than the alternatives, help your customer understand why.

Yes, selling value is more work than dropping your price.

But it can be much more rewarding—for your customer and your bottom line.

Are you selling your price—or the value behind it?

How can I help you on your Leadership Journey?