Astute Pricing by Sales Representatives can Expand Profit
One surefire way to grow profit is to deploy sales resources
that masterfully price your company's products and services. The
right price can boost profit more than improvements in the
cost-of goods sold or reductions in SG&A. Inappropriate
discounting dramatically shrinks profits.
Pricing discretion should be delegated to appropriately trained
sales representatives who have demonstrated an ability to sell
on total delivered value. That is, those who effectively appeal
to customers' needs for lowered product-life operating costs or
other financial benefits. Under this sales approach, product
price is a function of return on investment rather than a cost.
Selling on total delivered value requires sales representatives
to know their customers' businesses and profit making formulas.
Supplementing this information should be a knowledge of: 1)
customer-specific costs and price data (including won and loss
quotes) and 2) competitors' price levels and value propositions.
Thus armed, sales representatives will be able to: