Using value to support conversations about price increases...

04 July 2023

If you don’t communicate value when you sell your proposition to your new customer (your first sell), how will you demonstrate value to them when you need to put up your prices? (Your second sell).

Most businesses are facing the challenge of raising their prices this year. A few thoughts about how Customer Value relates to this process:

Preparation for a price increase conversation with your customer is essential though easy to overlook when you’re rushed (top-tip: role-play with colleagues before your key meetings).

The starting point with your customers is to explain the reason for the increase. Most businesses are experiencing their own cost pressures and even though they may not like it, will understand the rationale behind your proposed increase.

Broadening the conversation out from a focus on the nominal price will enable a more constructive discussion about Customer Value. In its most simple format: what you are delivering minus what you are costing. The aim is to identify areas where you can both agree that your customer is benefiting from your proposition, rather than getting stuck on the number.

The good thing is that your existing accounts will have experience of using your proposition and so when you reference specific examples of real value delivered, supported by metrics (financial or otherwise) you will quickly give context to your conversation.

Your proposition may also have delivered value across a range of your customer’s business functions, affecting a range of key role-titles. These can all be brought into a wider discussion to support your case. Don’t forget to include references from the end-users who may have identified areas of intangible value (speed, efficacy, customers service).

The more areas of Customer Value you can identify (the greater number of problem states you solve), the stronger your business case.

In these situations, having a nuanced and technical understanding of your Value Proposition puts you in a good starting position for conversations with your customers about Customer Value. Relevant component parts include: features, benefits, evidence, problem states, sector challenges, insight, alternatives, value word equations, metrics.

Most propositions have some “barriers to exit” and though it’s not great to have to rely on these (or threaten customers with them) understanding these can give you some breathing space whilst you search for additional value cases you might not have already identified.

And not forgetting… The role of inter-personal skills in handling discussions like these which can be easily overlooked when we are not paying attention.

Definitely a complex area.

I’d love to learn from you about your own experience in this area and how you prepare for your own price increase conversations…

Please share below…

#valueselling #valueproposition

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CPV have taken the mystery out of the sales process and shown us how to do it for ourselves, now I feel much more in control of our business” – PW, MD Financial Services SME

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