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You can increase both margins (by 1 to 3 points) and sales (by $1 million to $50 million) at the same time. Here's how.
Geoff, the president of a distribution company, faced a technology revolution threatening to obsolete his business model. In fact, their sales and margins were already eroding. Fortunately, Geoff’s team had developed a solution to meet the new set of customer needs resulting from the technology. But they could not figure out how to monetize the new solution and use it to profitably grow sales. Unless they could, the future looked bleak.
Even if your situation is different than Geoff’s, you may be experiencing some of these common challenges:
Any of these challenges places your company’s future financial results at risk, and put pressure on you to find solutions.
Stop and envision what’s possible when you grow your business by attracting customers who are more value-sensitive than price-sensitive.
Picture a future Friday evening as you leave work. You reflect on what happened that week:
So you start your weekend with confidence and peace of mind.
Just a guess… some or all of the following statements could have been written by you:
You can solve the problem of too many customers prioritizing price over value, attracting customers willing to pay more for premium value, and getting paid what your solutions are really worth. Here’s how you discover what to do:
Even if you don’t realize it, your company does something special—and potentially valuable—for customers. You just aren’t getting credit for it in the marketplace. That’s because it’s not obvious, and your marketing and sales communications don’t tell your story in a way that prospects and customers get an “Aha!” about your full value. That leads to attracting fewer value-oriented customers, and diminished pricing power.
To make sure that you’re not missing your biggest value:
In these ways, you can demonstrate your value so that you don’t have to lower your prices in order to land or retain customers.
Your prices are probably based on marking up from cost, and adjusting those prices in customer negotiations. Value to the Customer should be a major consideration, but very likely isn’t systematically incorporated into your pricing decisions today. That leaves money on the table.
Price using an approach that balances value to the customer, prices of the customer’s alternatives, and your own financial requirements. Develop pricing practices that align with your goal of getting paid what your solutions are really worth. Equip your team to execute those improved practices, and align them with your pricing improvement goals.
The right approach to pricing collects for the value your company provides.
Great Fit Customers are the ones to whom you bring value, are profitable for you, and don’t treat you as an adversary. If you don’t have enough of them in your customer mix, you’ll struggle to get paid what your solutions are really worth.
Doing business with the right kinds of customers is a powerful formula for profitable growth.
We helped Geoff and his sales team to deeply understand the value that their new solution would create for customers. Then we helped them develop a pricing structure based on value to the customer, and a strong value story that supported the pricing and attracted the right prospects. To Geoff’s delight, his sales team easily presented the value story for the solution, sales grew again, and they significantly improved their operating margin.
Marketwerks, an affiliate of Chief Outsiders, serves proactive executives of manufacturing and B2B services companies who are concerned they don’t have enough customers in their mix that are willing to pay a premium for the value they offer.
Bob Sherlock and his teammates solve the puzzle of how to attract enough customers willing to pay more for premium value, and pay what our clients’ solutions are really worth. As a result, they help companies to grow both sales and margin at the same time—increasing margin by 1 to 3 points and sales by $1 to $50 million.
Bob started Marketwerks in 2002. Earlier, he founded and ran a venture-funded logistics service company, served as VP – Marketing for an $850 million distributor and retailer, and held increasingly responsible marketing and sales management positions at GE. He is the author of Daring Caution: The Executive’s Guide to Pricing Improvement.
If you’re tired of customers that prioritize low price over total value… And want to get paid what your solutions are really worth, and attract customers willing to pay more for premium value…
The outcome you want starts with a phone call. Click the button below to schedule a discovery session with Bob Sherlock, president of Marketwerks.