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Focus on Profitable Growth, Not Higher Prices

Henry Winkler (yes, the Fonz) once said, “Assumptions are the termites of relationships.” That can be particularly true in the relationship between the sales team and the pricing team, where unspoken assumptions about the other group can slowly erode teamwork and morale.

One of the most common—and most insidious—assumptions that can damage the relationship between sales and pricing is the idea that the pricing team cares only about higher prices. And unfortunately, the behavior of pricing practitioners sometimes reinforces this idea. After all, if you are constantly nagging sales reps about their quotes being too low, they are going to think that what you really care about is getting higher prices.

The tutorial “How to Prevent Margin Meltdowns in the Field” recommends that B2B pricing practitioners counteract this assumption by focusing on profitable growth, not just higher prices. It explains that taking this approach will help keep your team aligned with the overall goals of the company and help your organization achieve more success.

But it’s not enough just to have an attitude that prioritizes profitable growth over higher prices—you need to make sure the rest of the company, particularly the sales team, knows that your goal is profitable growth.

Whether they are saying it to your face or not, certain members of the sales team undoubtedly believe that you care only about higher prices. To put that assumption to rest and prevent it from damaging your relationship with sales, you need to get out in front of it. Fortunately, there are several things you can do to demonstrate your commitment to profitable growth:

  • Put it in writing. Many pricing teams have successfully countered this assumption by publishing a charter, mission statement or manifesto that explicitly states their commitment to profitable growth. It doesn’t have to be long, but it does have to make clear that you aren’t all about raising prices. You can distribute your commitment statement through email or print it out and hand it out at a sales meeting or maybe even turn it into a poster that you hang on a wall.
  • Highlight the contrary. Don’t be afraid to blow your own horn. Any time you lower prices or restructure prices rather than raising prices, make sure everyone on the sales team knows about it. When those decisions generate profitable growth for the company, draw attention to those results. In some cases, you may also want to downplay occasions when you raised prices, even if that decision resulted in higher margins.
  • Walk the talk. Make sure you don’t fall into the trap of advocating higher prices all the time. When making pricing decisions, do the math to figure out which options will generate the best results for the company, and share those numbers with the sales team when you can so that they can see the thought process that led to your decision. If you’ve been guilty of advocating higher prices rather than profitable growth in the past, own your mistake and let people know that you plan to do things differently in the future.

If you consistently focus on profitable growth—not just higher prices—you’ll have a better chance of maintaining a positive relationship with sales. And that means that there will be a much better chance that they will follow your pricing recommendations when they are preparing quotes in the field.

Even more importantly, keeping your focus on profitable growth will make it possible for the pricing team to uncover new opportunities for driving margins and growth. And in the end, that will mean more success for you and your company.

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