Imagine you are a manufacturing company that implemented a new pricing strategy but did not align it with their sales team’s execution. Your pricing team used modern pricing software to optimize their pricing structure, but the sales team continued to use their old manual pricing methods. As a result, your sales team did not fully understand the new pricing structure, which led to incorrect pricing information being communicated to potential customers. Some customers were charged more than they should have been, while others were offered discounts that you could not afford and ate into your already thin profit margins. What’s more, the misalignment between your pricing strategy and sales execution could lead to lost revenue for your company, as some potential customers were dissuaded from purchasing your products due to confusion around the pricing structure and significant delays in your sales cycle, doubling down into more lost revenue and profit.
At Pricefx in recent years we have made it possible to manage, analyze and identify the optimum price points through the data of large-scale enterprise organizations, and use pricing as a lever to improve deal profitability and increase the win-rate of deals. Engaging your sales team will be the glue to scale up your pricing strategy and get the power of automated pricing software driving your company’s profitability ASAP.
In this article, we will explore three ways to align your pricing strategy with sales execution, engage your sales team with modern data-informed pricing guidance, and drive your organization’s bottom line.
The 3 Main Ways to Align Your Pricing Strategy with Sales Execution
Pricing software technology can benefit your business in many ways, such as improving deal profitability, increasing win rates, responding to changing market conditions, streamlining the pricing team’s strategic thinking, and providing transparency to the sales team on how discounting affects sales compensation. However, to get the entire company onboard with the use of pricing software technology, it is crucial to provide a more emotional “what’s in it for me” hook.
Below are three ways to engage your sales team with pricing software technology, and using the power of the technology to drill down into whatever pricing strategy you have decided will transform your organization for the better:
The first way to engage your sales team with pricing software technology en route to aligning strategy and sales execution is to highlight how it makes their lives easier and improves win rates. Once your salespeople are onboard with using the technology, using a modern automated pricing software will be the guiding light to not only implement your pricing strategy, but also switch your pricing strategy ‘on the fly’ if and when market forces dictate.
Use the automation of pricing software as a lure for your salespeople to become aligned in using and adopting the technology to simplify their everyday tasks. Just as using ChatGPT has helped your organization augment your social media marketing strategy with ‘smart language-learned content,’ using an automated pricing software provides the ability for your company to ‘work smarter, not harder or longer.’
Salespeople are not responsible for signing the checks for a pricing software solution, so they are more likely to be motivated by the promise of a greater work/life balance that technology provides.
For example, the potential of your Pricing Manager now updating your price lists of 500,000 SKUs automatically in 15 minutes at the click of a button rather than two-and-a-half months of sifting through Excel spreadsheets. Suddenly, automated pricing insights provide your salespeople with a smart ‘price corridor’ will drive your sales team to focus on targeted and strategic selling aligned with your strategy. What’s more, experience has shown us that with automated pricing software engaged pricing teams have more bandwidth to discover pricing insights and pathways to profit that align with overarching organizational goals.
Salespeople thrive on winning deals, so anything that improves win rates will be welcomed with open arms. Modern pricing software technology provides data-informed pricing guidance that helps the sales team create more accurate and competitive quotes.
The technology can help your sales team stay ahead of the competition, improve their sales performance, and win more deals. By leveraging pricing software, your sales team can gain valuable insights into the market and switch thinking to be more strategic and consider what potential customers are willing to pay for your product or service. This information can then be used to price your offerings more competitively, helping your sales team close deals faster and efficiently align your pricing strategy with your sales execution.
What’s more, with pricing automation, you can quickly analyze market trends and customer behavior to identify the optimal prices for your products, reducing the risk of overpricing or underpricing. This can help increase sales and profitability while minimizing the need for manual price adjustments. Gone are the days when the Pricing Manager manually updates pricing every morning, you can now respond to competitors in real time ensuring you never miss a sales opportunity.
In fact, you can even simulate how changes to your price lists can influence your margins and plan your pricing strategies to shift on the fly to keep pace with the rate of change in the marketplace. Check out this handy video to learn more:
2. Implement a Transparent Sales Compensation Tool
The second way to engage your sales team with pricing software technology is by providing a transparent sales compensation tool. Salespeople and account managers are the main drivers of bringing in new deals, making money, and increasing profitability. Ensuring that their compensation plan is effective, and fair will motivate them to use your innovative pricing software solution to bring in deals that grow your business. By providing a transparent technological tool that gives clear guidance and advice on how they are performing towards their targets, you can make the sales team feel that their contributions are recognized and valued.
One way to implement this is by using pricing software solution that provides comprehensive dashboards to track the performance of sales teams. These dashboards can be customized to show individual targets, team performance, and even company-wide Key Performance Indicators (KPIs). This allows the sales team to understand how they are performing and how their contribution translates into revenue for the company. By providing this level of transparency, you can foster a sense of trust between the sales team and the pricing team, encouraging better collaboration and communication.
The unique Pricefx Sales Compensationfunction is a terrific way for your salespeople to assess how they will make money and can also serve as an indicator of how your organization will grow its revenue. The compensation plan is built to incentivize selling behavior by:
Ensuring that salespeople sell within the given guidelines
Prioritizing deals leads to selling larger deals
Or selling more deals depending on the needs and goals of the individual and organization.
The Pricefx Sales Compensation can empower your organization to have a sole source of truth bridging the gap between the pricing and sales teams and have them cooperating to achieve your company’s goals.
3. Align Sales Execution with Pricing Strategy with a CPQ Solution
The third way to engage your sales team with pricing software technology is by using a CPQ (Configure, Price, Quote) solution to streamline your organization’s quoting procedure. CPQ solutions are designed to reduce manual input time and improve the quality of the output. A CPQ solution allows you to provide a faster response to customers and reduce errors in quotes, which is essential to improve the overall customer experience.
By implementing a CPQ solution, you can provide a consistent pricing strategy across all sales channels and ensure that pricing is aligned with your company’s overall business objectives. This helps to eliminate pricing inconsistencies and errors, reducing the risk of losing potential customers due to inaccurate quotes. Additionally, it reduces the administrative workload of your sales team, allowing them to focus on building relationships with customers and closing deals.
The secret behind CPQ is the “P” – standing for price. With a complex and/or wide and diverse product range, with that level of complexity comes even more intricate pricing structures. Without CPQ, if your organization offers customizable products, your salespeople will only have a static price list to configure their quote from.
Sales teams attempting to contrive prices and quotes on their own manually will be at risk of losing business and revenue due to offering less than optimal prices and generating slow turnaround times on your quotes.
What’s more, when used at its most powerful and insightful, intelligent CPQ software implements artificial intelligence optimization to notice customer buying patterns and market research to determine what your customers are willing to pay.
Essentially, CPQ can provide price guidance and manage authorization processes to ensure that you are offering a reasonable and customized price (including promotions, rebates, and discounts) to your customers while maintaining profitability (and other business objectives) for your company.
Aligning Pricing Strategy with Sales Execution Never Finishes: It is an Ongoing Labor of Love
Now you know that aligning your pricing strategy with sales execution is crucial for maximizing profits. Modern pricing software technology can benefit your business by improving deal profitability, increasing win rates, responding to changing market conditions, streamlining the pricing team’s strategic thinking, and providing transparency to the sales team on how discounting affects sales compensation. To engage your sales team with modern data-informed pricing guidance, it is essential to highlight how pricing software technology makes their lives easier and improves win rates, provide a transparent sales compensation tool that clarifies expectations and results, and use a CPQ solution to streamline your organization’s quoting procedure. With the three key methods mentioned above, you can get your sales team onboard with pricing software technology, drive your organization’s bottom line, and ensure the realization of your pricing strategies.
It is also critical to regularly review and update your pricing strategy to ensure that it remains aligned with your business goals. This means monitoring market trends, analyzing customer feedback, and keeping a close eye on competitor pricing strategies. By doing so, you can ensure that your pricing strategy remains relevant and effective, providing your sales team with the tools they need to succeed in a dynamic and competitive marketplace.
Furthermore, it is important to recognize that aligning your pricing strategy with sales execution is not a one-time process, but an ongoing effort that requires constant evaluation and refinement. This means regularly reviewing your pricing data, analyzing your sales performance, and adjusting your pricing strategy as required.
By doing so, you can ensure that your pricing strategy remains effective and relevant, helping your sales team to succeed and driving your organization’s bottom line.
It is worthwhile to note that implementing pricing software technology like the award-winning Pricefx solution can be a significant investment for any business. However, the benefits of doing so can be substantial, including increased revenue, improved customer satisfaction, and enhanced operational efficiency. To ensure that your investment in pricing software technology is a success, it is essential to carefully evaluate your options and choose a pricing software option that best fits your organization’s key objectives.
Check out the handy article below to discover how to determine the best pricing software for your company’s business needs:
Isaias Jaramillo-Rojas is a Solution Strategist at Pricefx, where he provides guidance in the sales process by creating suitable and custom solutions for companies that are looking to boost their pricing performance through data supported decisions. Working in the past years as a Pricing Manager in the DACH Region, he focused on the development of omni-channel distribution strategies and automatization of end-to-end pricing business processes.