Increase Your Distribution Pricing Power

In order to win more distribution clients and deals at the end of your sales period, do you slash your prices and reduce your margins?  If so, you may want to look at these alternatives, which sweeten the deal for your clients, but maintain your pricing levels.

Make certain your Sales team knows your prospective client’s pain points.  Product cost is rarely the only driver in their decision making process.

Three specific areas where suggesting different contract terms versus lowering prices that may win you the client are:

Payment Terms – does the client need more flexible time frames or methods of payment?

Service Level Agreements – can you offer better order turnaround time or better delivery speed?

Packaging – can you offer kitting or packaging that reduces their processing, warehousing or display costs?

This report on Sales and Pricing from the Aberdeen group, shows 63% of the time top sales organizations do not use a price discount or decrease to win a deal.  It is important to acquire new business and grow your company, but it should be a priority to do this profitably.  Too many times sales organizations are only focused on sales volume and growing top line revenue.

Many high performing businesses are investing in price optimization technology solutions.  These solutions are used to give your business team a better understanding of what sales tactics, messages and prices have been used most successfully to win clients in the past.  The decision-making data output from the solution provides more predictable future opportunities and results. This can also result in a superior level of sales speed, competence and confidence.

Your Enterprise Resource Planning (ERP) system is the starting point for the data you need for a price optimization analysis.  Start with a review of your prices across sales groups and regions as described in our previous article, and contact the Socius team for an upgrade to your existing ERP or reporting tools to simplify and streamline your analysis process.

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