Head Trash and Pricing.
In a conversation last week a firm said, “I over-priced it.” I asked, “what do you mean.”? She said we didn’t win the work.
Folks, just because the prospect doesn’t move forward doesn’t mean the price was too high. There are more nuances to a prospects decision/outcome than just the price was too high. For a prospect to accept a price the value must exceed the price. Again, for a prospect to accept a price the value of the outcomes must exceed the price.
Value less price equals client profit. Profit less cost equals firm profit. In other words, in the example above, value didn’t exceed price in the clients perception.
You need to ask yourself how is the firm positioned? Are you competing in a sea of sameness or are you differentiating the firm? Check out how Stopp and VanHoy, one of our clients, differentiates themselves, https://www.stoppvanhoy.com/who-we-are/our-process.
Did you follow the proprietary ReNew Sales Ladder (ask us for details) including properly diagnosing and prescribing the prospect. Did you get the prospect to agree to the objectives of the project? Did you ask what there alternatives were and who you were competing against? Did you ask them if they had any other concerns. For example, a comprehensive list of pains/gains/project scope and timing to name a few.
Most firms head trash is they priced the prospect too high… Our suggestion is review the process. In Thinking in Bets author Annie Dukes eloquently demonstrates that we need to separate process from results. In our world, did we follow the process and did we win the work at a price where everyone wins.
Another place where firms have pricing head trash is if the prospect/client questions or complains about price. That does NOT mean the price is too high. It means they complained about price. Most firms internalize the comment and think “our price is too high.” Head trash!
Be sure to take out your pricing head trash!
Most firms have more work than they know what to do with and are in the best financial position they have ever been in. So what’s next for accounting?
Here are some quick hits that might help you better manage your time