Hello, and very good day, everyone.
Welcome to Let's Talk Pricing, the official podcast of the
Professional Pricing Society. I'm Kevin Mitchell from PPS, and
I'm very happy that you're with us for today's episode.
Today we're going to be talking about equipping sales teams to
build pricing power. And we all know that pricing
power isn't just about the numbers, it's about execution.
Your pricing strategy is only as strong as your sales team's
ability to defend value and to avoid unnecessary discounts.
So how do you make sure that they have the right tools,
structures, and confidence to uphold your prices effectively?
And to answer that, I'm joined by Lori Riboski and travels
Travis Humblebee from Holden Advisors.
Lori Riboski has 15 years of experience in B to B industrials
and manufacturing. She specializes in customer
value research and price model design.
She has worked in pricing, marketing, analytics, and
engineering. She holds an MBA and ABS in
Mechanical Engineering from Northern Illinois University,
and Lori got her certified Pricing Professional her CPP in
2021. Travis Umpleby has spent 25
years in sales strategy and capability development.
He coaches teams on negotiation techniques and pricing
confidence. He's a master facilitator for
negotiating with backbone programs.
And he is an also, he also is, I'm sorry, an adjunct professor
at Utah Valley University. So, Lori Travis, welcome to the
show. We are very excited to have you
here. Thanks for having us.
Thanks, Kevin. Thanks for inviting us to also
be a part of your conference coming up and to be able to
teach this workshop. We'd love to be able to share
ideas and to gain insights from from people that are
participating in your conference.
Definitely, yes, we're very much looking forward to your workshop
at the PPS conference coming up, will be in Dallas from May 6th
to 9th. So thank you for the reminder
there, Travis, appreciate that as well.
All right, so we're going to start today by talking about the
relationship between pricing teams and sales teams.
And a lot of companies struggle with aligning these two
functions. Sometimes we're too siloed.
Sometimes there can be, to put it politely, maybe a little
healthy competition between the two.
Sometimes there can be a lot of discussions about how pricing
and sales can partner more effectively.
So from your experience, what are some of the biggest
roadblocks to getting pricing and sales on the same page?
That's really a good question. And I wanted to call it
something that I read in your brochure for this upcoming
conference that I thought was really insightful and too often
it's overlooked you. You say on that brochure that
and it's right on the front page, it says, hey, we're doing
this to empower pricing and price adjacent teams to really
kind of create revenue. And I just thought that's so
insightful that it really is about pricing adjacent teams.
You mentioned the silos and that is something that we see happens
way too often. We do things to improve our
pricing capabilities and we do things to increase our sales
capabilities, but we rarely do things that combine these two
and improve our sellers ability to communicate and achieve
pricing alignment, right. So this is something that I
think the silo perspective is something that eliminates
pricing power, right? It there's either pricing, you
can get really good at pricing and you can get really good at
selling. But if you don't bring those two
together, you don't have pricing power.
You have good sales teams and good pricing teams.
Absolutely, Yeah. Without that combination,
without that partnership, it's really more of an academic
exercise until things really get out there to your marketplace
and to your customer base as well.
All right, another question. Price leakage is a huge
challenge for companies. What are some common causes of
price leakage and how can companies structure their
pricing models to prevent this? Well, by far, discounting is the
biggest contributor to price leakage.
Often your sales teams are getting pressure when they're
out in the field and that knee jerk reaction is just to give a
discount. It's the easy answer, but it's
not really addressing the underlying issue of why those
customers are asking for a discount anyway.
Is it because they're just used to asking it and used to getting
it? Is it just maybe you're offering
them more than they need and so they don't want to pay that
price because they don't need half of what you're giving them
anyway? So an example from a client we
worked it with before, they were an equipment manager and they
found manufacturer and they found that their sales reps were
offering discounts all across the country to different
customers and they couldn't figure out what was going on.
So once you started evaluating what their customers needed, we
were able to see that there were different needs by different
segments, There were different needs in different areas of the
country. So we were able to work with
them to really align their offering and the pricing that
went along with that for each segment and each region.
So once the sales team got equipped with that, they had all
the tools they needed to go out and sell and they had the right
price, the right product for the every situation.
And instantly they were starting to see that reduction in the
discounts that were being given. Very nice.
Yeah. Thank you for the insights
there, Lori. A great example of how we can
get everyone essentially on the same page and working together
there. So I appreciate that.
Thank you very much. And now let's talk about some of
the strategies that help sales teams sell with confidence and
protect margins. So Lori, I know from our
dealings together and from knowing you for quite some time
that you are an expert in pricing analytics and how you
deliver customer value. How do you talk about that?
So with your experience in pricing model design, customer
value research, and some related things, tell us about some of
the key elements that make a pricing structure effective for
the sales team. Sure.
It really comes down to understanding what your clients
needs are and then matching the value you provide to what those
customers are looking for. So another example for you, we
worked with a client that offered legal documents to their
customers. The problem was they kind of
offered instead of an all or none approach, it was an all or
one approach. You could pay for a monthly
subscription that gave you access to all of their documents
or you could just buy 1 document at a time as you needed it.
The problem was they had a lot of customers that didn't need
everything and didn't want to pay for it, but they needed
enough that buying one at a time was annoying.
So they were either overpaying or having a nuisance in how to
get what they needed. So this was a great project for
those of you pricers out there, the data nerds.
We were able to really get into the details of their data and we
started detecting patterns. So we started seeing that
different segments, different users tended to buy the same
types of documents and it just led to a natural fit to create
different offer packages to these customers.
So what we're hoping to do in our workshop that's coming up is
to give attendees this same experience.
So we're going to be able to offer them a sample case that
they can use, and it's going to come with their own data set so
they can get in there and get their hands dirty and start
detecting these same patterns to develop offerings.
And then when they're done with the conference, they can go home
and look at their own company's data and hopefully be able to do
the same thing to start matching the value of their offering to
what their clients actually need.
Yeah, excellent. That's a great example of
pricing people since we have the tendency if we're doing our jobs
effectively to be in the middle of everything and to be able to
take elements from overall macroeconomic data from our
customer responses from internal departments on what they're
saying. But that's a great example of
how a pricing team in conjunction with your work as
well, of course was able to create new products and new
services for their team. So that's something where you're
you have the ability to take all the information that comes to
you as a center of a lot of facets of the business
organization and use all of that essentially to move things
forward. So thank you for the example
there. And another question, when it
comes to upselling strategies, what should pricing teams be
doing differently to help sales teams align Austin, to align,
I'm sorry offers with that customer value?
So being able to provide your customers with options is really
important and it helps with that upsell opportunity.
So we often recommend kind of a good, better, best strategy,
which is allowing your customers an easy entry point, a way of
experiencing your offer and your value at that base level, but it
also provides options for them to move to higher value packages
when they need them. So a great example people could
relate to is if you think of all the streaming options out there,
you have so many choices. So first, you can choose which
company fits your needs. Unfortunately for me, it tends
to be almost all of them because every member of my family has a
totally different need. So I may prefer watching
Netflix, but my 10 year old daughter wants anything Disney.
So of course we have to have Disney Plus too.
But beyond that, once I choose those companies, I can choose
which package I want. So I can go in entry level and
watch the commercials and deal with those things.
Which for me is fine because when I grew up we had normal TV
and commercials were a thing. So it doesn't bother me.
However, my kids keep nagging me that we should upgrade because
they want that ad free experience.
But until they start contributing to that payment,
we're just going to stick where we're at.
So you can see, just offering different packages gives people
choices of where they want to be, and you can always upgrade
later. And this concept works the exact
same way with B to B as well. Everyone wants options and they
want to be able to align what they need with what you're
offering and what their budget is.
Yeah, absolutely. It's a great way to let your
customer base help you with your own segmentation because some of
your, even if you're B to B, you have some people as you
mentioned, who are the equivalent of I only want Disney
or I only want Netflix, Netflix or I want any and all of the
above. So understood.
Thank you very much, Lori. Appreciate that.
And Travis, I know that some of your areas of expertise are
sales negotiation, capability development, amongst other
things there. So a couple questions for you.
I know that you have been a trainer for quite some time.
You spent years coaching sales teams through negotiating with
backbone. What are some of the biggest
mistakes that sales reps make when they defend their company's
price? Oh, I'm going to say something
that's a little controversial. I think one of the biggest
mistakes that sells people make is selling.
That sounds interesting. Yeah, Well, so and, and here's
the reason. So we have research that
actually backs up that customers don't engage with the sales Rep
until they're almost 75% through the decision making process.
And and that seems backwards because the sales guy who knows
their business and their products better than the sales
guy. So why are they waiting so long
to engage with these people? And the answer is that they
don't want the sales pitch, right?
They know that the minute I start engaging with the sales
guy, I'm going to get this heavy pitch.
And I don't want that. And so they wait until they've
already done all the research on their own and essentially
decided on the solution that they want.
And then when they engage the sales Rep, it's all just about
negotiating price. And then it's very hard to
defend your value at that point because the customers already
decided what the value is, that they want, what they care about.
And so one of the things that we spend a lot of time doing is how
do we engage with our customers in a different way to uncover
value, to uncover the needs of the customers.
We know that really what they're trying to do is make money.
So we need to understand what's the hurdles that's standing in
their way of making money and how do we uniquely solve that
problem. And then it becomes a very easy
process when we get to the cell stages at the end.
Understood. So really you are coaching teams
so much not don't be necessarily a salesperson where you think
kind of inside out here are my benefits, here's what we can do
for you, but you're kind of reversing that and saying what
are the issues that would work best for my customer and how can
I be the solution there. So it's really kind of a
solution standpoint instead of a sales standpoint, if I'm
understanding that correctly. That's right, you need to be.
You need to be more exploratory. You need to be more discovery
with your customer. Understood.
All right. And another question how can
organizations improve the collaboration between pricing
and sales teams so that pricing fences aren't seen as barriers,
but instead they could be seen as a strategic tool or an
initiative? Yeah.
So This is why I brought up that sellers need to do less selling
and more discovery. Just think about from A and
like, let's be honest, we're talking to pricing people.
That's who's here listening to this and they look at me and
say, sellers, they just cause me problems, right?
What would a pricer do if the salesperson came back to them
and said, hey, this is the problem that our customers are
having and this is the solution that we have.
Can you help me figure out how our solution is impacting their
business? How are we creating more revenue
for this? And my experience has been that
pricing people love to do that. They love to solve these
problems. They like to get in with the
data and wrap the numbers around it and come up with solutions.
To be honest with you, they like to do it more than the
salespeople do. That's why the salespeople bring
it to them. And then the sellers love it
when the pricing people go to them and say, hey, here is a
solution and here's some alternatives if this isn't
exactly what they're looking for.
It helps really improve the conversation that customers are
having with their their sellers, that buyer seller relationship.
And so by doing this value discovery, we we're bringing
what sellers can bring more insights into the organization
that pricers can use to create better solutions and options.
And really to Laura, to Laurie's point, it's the tools.
They can create more tools. So we're not sending them out
with a hammer and telling them fix all construction issues with
a hammer. Sometimes what you need is a
screwdriver. You need to just tweak this one
a little bit. You don't need to just keep
bludgeoning it over the head. And the tools that pricers can
create with the diversity that Lori was talking about really
makes that powerful. Absolutely.
Yeah. Thank you so much.
And I know from my experience, you know, even going back to a
certain Mr. Reed Holden and negotiating with Backbone and
the books that he and Jeet Mukherjee and others in your
organization have written, that value discovery and how you
handle that is such a big part of the process.
And it really gives us a way to be more outside in, to think
about this from our customers perspective, to use a little
game theory there to think if I were in their shoes, what would
be the things that my organization offers that would
be really, really value valuable to them.
So value discovery, as you mentioned is such a big part of
it. And that's something that
pricing people and revenue managers, that's something that
we can be really attuned to with our broader notions and our
broader knowledge of what's going on with the customer base
at all instead of what's just, instead of just what's going on
in one particular geography or sales territory or something
like that. It's a case where we have to be
more universal and say, hey, I heard something in Rhode Island
where this group of customers really valued AB and CI.
Wonder if in larger organizations in Texas and
California if that would work as well.
So understood. And another question for you,
please. In your experience, what role
does sales training and capability development play in
strengthening a company's overall pricing power?
So this is a good point you had called out earlier that you
know, I have all these years of working with sales team and
helping them do negotiating with backbone and, and and other
sales programs. The irony is, is that I started
especially with Holden as a pricing analyst, kind of like
Lori, just not as good. And so I started off in the
space. So when I do sales training,
when I'm working with sales training, I'm doing it from a
pricer's perspective because that's what's going to help
create more pricing power. If they understand what's behind
these numbers, how to defend these numbers, and as we've
talked about already, how to bring insights into the
organization that allows pricers to give you the tool that you
want, we're going to them and say, sharpen your pencil, right?
That's what you're hearing. You hate hearing it.
How do you think your pricing team feels about hearing that
right? It keeps them up late at night
and they're working on stuff. They want this business to grow
just as much as the sellers do, pricers do.
And, and sellers, they all want this business to grow.
And so we need to give them more information.
Sharpen your pencil Where, why? Why do they care about it?
Why is this important to them? What do they not care about that
we can maybe take out? What do they really care about
that we need to leverage and say, hey, we're defending this
value. It's worth it.
And how can we show them that what we're doing and the value
that we're creating for them is, is helping them make more money?
I, I do this all the time with different sales guys.
I asked them this question if I were to give you and I'll, So
I'll ask you, Kevin, if I were to tell you, hey, you give me a
dollar, I'll give you 5. How often would you make that
trade? 100% of the time and I would
reach for as many dollars as I can find that's.
Right. I would be like as fast as I
could be giving you dollars, I would be doing that, right?
That's what selling is, right? We are showing them when we do
good value discovery and good conversations.
All we're doing, and this is what Lori is really great at
helping us understand, is going to really call out in the
workshop that we come together with.
How do we show that the value we create is meaning that you spend
100,000 with us or you spend whatever with us and you're
going to make 2X that in the long run, right?
Then it makes the sales process very easy.
The challenge is how much confidence do they have in your
ability to deliver that value? And that confidence comes from
bringing that sales and pricing team together to understand and
discover that messaging together.
Definitely, yeah. In a case like that, my credit
card number is 1234 and my opinion 5678.
Yeah. So you have much more confidence
in my ability to give you $5 than what I actually have.
Understood. Thank you for that.
I appreciate that we are beginning to come up on our time
allotment, but I do want to have a section for some final
thoughts here. So we've covered a lot of great
insights today. So Lori Travis, thank you so
much. But I do want to ask both of you
before we sign off, if there's one piece of advice you can give
the companies looking to strengthen their pricing power
through sales and enablement, what would it be?
And Lori, why don't we start with you?
Sure. I know when it comes to pricing
power, the key to remember is this is a team sport.
It's not US versus them, sales versus pricing.
You're on the same team, you're not competitors and you have to
even look at those other adjacent functions.
You need each other for this to work in its best way.
Sure, the pricing team may be like your playmakers and they're
coming up with all the strategies in the plays, but you
still need the sales team to execute.
And then if you back up, how does pricing determine what
those plays are anyway? Well, they need to understand
what the customer's needs are and what they value.
Well, where are they going to get that?
Well, they're going to get it from their sales team.
It could come from customer service, your tech support, it
could be your quality department.
Anyone who's interacting with a customer is someone who could be
giving you that valuable insight into what your customers needs
are. So you need to get that from
them in order to create the right offerings, the right
pricing. Then you have to come back
around and make sure they all understand what that offering is
and what value you provide so they can be prepared to go out
there and sell it. All right.
Thank you very much. Appreciate that, Lori.
And for Travis, Sir, for you the same question.
One piece of advice for companies looking to strengthen
their pricing power through sales enablement through sales
initiatives, please. Hey, I'm not going to argue with
Lori. She's a lot smarter than I am.
It it really is that same piece. It's that, it's that
collaboration and that it's that coming together which she
iterated so well. You know, we think about this,
you know, if pricing were the head, right, the head doesn't go
anywhere if you don't have arms and legs to carry it somewhere.
And the teams that figure this out and start to align these
together, they're running races like these people are
accomplishing great things. These organizations are doing
well because they're aligning this.
And it's, it's baffling how much organizations still don't
coordinate this pricing sales effort.
And they're, they're like, to carry on the analogy, they're
like toddlers, like falling all over the place trying to figure
out how to walk because they don't have their head and their
arms and legs all working together.
So if you want to make true strides and, and really grow
exponentially, you need pricing power.
And that takes a holistic pricing sells operational.
There are lots of people that play into this, this piece of
true pricing power. Definitely.
Yes, that's great advice. And so I want to thank you so
much. But also I'm going to take one
second and talk about Lori and Travis here.
A couple interesting things. And Lori, first of all, you
first started coming to PPS conferences as a pricing
practitioner and just wanted to say that it's great someone who
came to us as a pricing practitioner is now leading
workshops. So thank you very much for your
long time partnership for being with us and for doing that.
And Travis also you as well with your experience, you know, not
only being a professor at a university, but also the work
that you do with sales teams, with negotiating, with pricing,
with confidence and your history there.
I think that the two of you together coming from somewhat
different parts of the business world, but coming together have
some great insights. So we are looking forward to
some wonderful information there.
Lori, Travis, thank you so much and make sure to join us at PPS
Profitable in Dallas coming up in May.
If you want to dive deeper into these strategies, make sure to
join the great Wednesday, May 7th workshop that we have with
Lori and Travis entitled Equipping Sales team to build
pricing power. And of course, you can check our
website to register for that. Or if you want, you can just
reach out to me and we can happily connect you with Lori
and with Travis for any other information that you need there.
And also make sure to subscribe to us on the Let's Talk Pricing
podcast on either Apple or Spotify or wherever you get your
podcasts. Make sure you never miss an
update. And Lori and Travis, thank you
so much. Thanks also to Alex behind the
scenes for working with us as well.
And thanks for joining us and until next time, we will sign
off for now, but looking forward to seeing everyone again real
soon.