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: