Since publishing this white paper, numerous endorsements and inquiries came in. I will address some of these in this update.
From Arturo in South America:
Great timing for this info. I am just in the midst of such value - added discounting on a possible Lean project in Lima. And I tell you, you are dead on with your advise. I have gone from an implementation project to a training project and now the client is asking me to again re-visit the implementation scenario. And yes, we have cut back in expenses as we reduce the price..........only time will tell if we are not producing a Frankenstein in the Andes!!!
Saludos cordiales
Arturo is a sharp sales professional. He is wise to question whether or not he is creating a monster by boosting his sales with progressive pricing. Here is why he is safe:
· His customers understand why he is able to offer a more favorable price (they are temporarily cutting back on expenses)
· His customers are keeping him fully engaged by asking for additional services from him
· His customers are focusing on Lean principles and he is educated, equipped and confident in helping them in this area
· He continues to move the sales cycle forward
From Numerous Clients/Readers
Is progressive pricing the "new normal"? How do we know when it is right for each client?
Progressive pricing is at least a part of the new pricing strategies for most companies. Whether or not it is right for your company and for different situations is something you must decide. Don't guess. I have added a Pricing Calculator to the SaleSSuiteS site that gives you a simple, first look at the impact of progressive pricing. Use your best business sense balanced by market conditions to make your decisions.
Some organizations have decided to make progressive pricing a part of their business model for the foreseeable future. For them, it is a part of the new normal. Others have decided to use it only as a bridge to the recovery. For the latter, it is important to communicate to the customers that this is, indeed, temporary.
From Vistage Member Steve Blue
Great whitepaper! I am going to ask my sales team for some feedback and ideas around it.
That is the purpose of these white papers and the best use of them. Use topics and resources like this to generate new ideas in your organization. Remember, whenever two minds come together a third mind is created. Have regular brain storming sessions with your team members - there is always a better way to do things. When considering progressive pricing, include people from engineering, operations and finance in the discussions.
No matter how brilliant we are, including other minds will enhance our understanding.
From The Grapevine Group (Temporary/Full Time Placement)
In a newsletter to their clients:
Grapevine Group
Progressive Pricing Solution
In a down economy talent acquisition budgets are tight. It is important to work with someone who asks you:
What do you actually want?
What do you actually need?
So, try me! Tell me the outcome you would like to have and tell me what your budget is. I'll show you how we can work together.
Notice the directness. 1) Acknowledge the client's situation. 2) The challenge: "try me!" 3) Simplicity of the message: quick, easy read, immediate call to action.
From Newsweek Magazine (8/24 & 8/31, 2009)
Headline:
"Paid is the New Free"
Pay toilets on airplanes? Not likely, but what else would the customers/passengers be willing to pay for? Things that have been free are now having price tags attached. So the airlines, strapped for cash, are charging for each bag checked. Some are charging more for the second bag.
Will customers willingly pay for things they have come to expect for free? The jury is still out but the results are leaning heavily towards yes. This is less likely when the customer has the option of providing it on their own. Some examples:
· Airline luggage: rather than pay a fee for a checked bag, many passengers are buying larger roll-aboards and going through the hassle of taking it through security.
· Reduced flights: as the airlines cut back flights and push the supply-demand equation to their side of the table, travelers are finding ways of making time on the road more productive. (It's a great time for the introduction of Wi-Fi on airplanes.)
· Web: for years, the most active web users (18 - 32-year-olds) expected everything on the web to be free. A few lawsuits (Napster) helped to dampen that expectation. The introduction of the i-Phone from, of all people, Apple has made paying for downloads the new normal. No wonder the company that "never discounted" is cutting the price on the phones - there is money in the apps.
Will progressive pricing work for your organization?
Will it cannibalize your sales?
Should it be a part of your new normal?
So, try me! Tell me the outcome you would like to have and tell me what your budget is. I'll show you how we can work together.
