In biology, hormesis is the idea that a little bit of a toxic substance can be beneficial — even though too much would be harmful or even deadly. For example,
- A small amount of sunlight gives you the vitamin D you need to live, but too much causes skin cancer.
- A little bit of alcohol can be good for your heart, but drinking to excess will damage your liver.
- Intermittent fasting can improve your health, but if you fast all the time, you starve to death.
- Plants need water to survive, but too much will kill them.
- Two Tylenol will cure your headache, but just a few more could kill you.
- A small dose of a virus will spur your immune response and prevent illness, even though a larger dose would cause you to become very ill and possibly even die.
Scientists refer to that sweet spot where you experience the benefit without the potential harm as the “hormetic zone.” And when we look at the interactions between sales teams and pricing teams, we can also identify a hormetic zone.
You see, there is always a certain amount of tension between pricing and sales. That friction is due in large part to the different objectives and incentives for the two teams.
Pricing is very focused on the big picture. Your goal is to ensure that the company maximizes its margins even if it means losing an occasional deal.
Sales, on the other hand, is very focused on individual deals. Their goal is to find a way to make those deals happen, even if it means falling slightly short of target prices.
Now this may surprise you, but both perspectives are actually valuable for the company. Too much focus on big picture margins may result in too little revenue. And too much focus on revenue might erode margins.
The friction between the two perspectives helps keep the company on the right course.
Of course, just like vitamin D and alcohol and Tylenol, too much of this good friction can be very detrimental. Your goal should be to keep your teams in the hormetic zone where you are challenging each other’s perspectives without creating a toxic environment.
As you might have guessed, we have a couple of resources that can help. Reducing the Friction Between Sales & Pricing talks about the hormetic zone in more detail. It delves into some of the other reasons for conflict between the two groups, and offers suggestions for keeping that conflict in balance.
Getting Your Salespeople to Price Better offers more helpful tips for working with the sales team. It includes some proven, real-world techniques that other B2B pricing teams have used to improve the sales team’s approach to pricing.
Finally, The Pricing Practitioner’s Primer on B2B Sales can help you understand what makes salespeople tick. It gives you insight into their thinking that can help you find ways to enlist them as allies rather than adversaries.
A little bit of tension between sales and pricing is a normal and even a beneficial thing — but only if you keep it in the hormetic zone.
Reducing the Friction Between Sales & Pricing
Some amount of "friction" between Sales and Pricing is expected. Too much, however, is counter-productive. In this on-demand session, we discuss dozens of ways to address seven root-causes of friction and conflict between the Sales and Pricing functions.
Getting Your Salespeople to Price Better
Chances are, the behavior of your salespeople will ultimately determine whether your pricing strategies are effective or not. In this on-demand training seminar, learn proven approaches and strategies for getting your sales team to price and discount far more effectively.
The Pricing Practitioner's Primer on B2B Sales
To be most effective in B2B environments, pricing professionals need to learn as much as they can about their sales function. In this on-demand webinar, learn more about aspects of sales people and processes that can affect pricing performance.
