How to Price your B2B Offerings
Nobody probably argued with Katherine Paine when she observed, “The moment you make a mistake in pricing, you’re eating into your reputation or your profits.” This is a matter of common sense. Right? Wrong.
In B2B business, Pricing has always been a sticky subject, be it product or service.
“What is the right price?” “How should we price our offering?” “What should be our discount structure?” These are some of the questions that have troubled the senior management over the years.
Despite significant development in research & analytics, Pricing still remains an area of circumstantial compulsion and conjectural expediency. Can it be better? Well, yes.
Let us show you how to blend the art and science of Pricing to maximize both your reputation and profit.
To succeed in B2B Sales with the right Price, one must assimilate the two cardinal principles:
- People buy from People
- People want to “buy”. They don’t like to be “sold”
Just like ordinary consumers, B2B Buyers are individuals. But they operate in a business set up — within the ambit of certain policy and compliance guidelines.
Interestingly, the psychology that drives the Buyer is similar in both B2B and B2C cases. Sounds absurd? Well, it is not.
Let’s pause for a moment and take a deep breath.
So, what drives a Buyer? You may ask “B2B or B2C?”. Well, it doesn’t matter. In either case, the Buyer is driven by certain Stated, Implied and Dormant needs. The chance of closing the deal is proportionate to the Seller’s understanding of all three needs, irrespective of B2B or B2C. Price is important, but not necessarily the sole criterion for selection.
Let us delve a bit deeper.
In a buying situation, the B2B Buyer is likely to consider some or all the following
- Selection (various options)
- Convenience (of purchase, usage and disposal)
- Benefits (technical, functional, financial, emotional).
Wait a minute. Don’t we all consider the above while buying a cell phone or a vacation package? Hey, aren’t these B2C products? Well, this is exactly the point.
Be it B2B or B2C, the buying drivers and decision considerations pivot around similar parameters. Yes, there are differences too. But I guess you already know them (for example: the budgeting process, approval mechanism, legal contracting and a few more).
The level of sophistication and maturity for assessing the available options (and finally arriving at a purchase decision) may vary from company to company.