Sales and pricing teams are sometimes at odds with each other. Sales teams feel that pricers don’t understand the nuances of their deals and pricing teams feel like salespeople are always quick to discount a deal just to get the sale! In this session, Loretta Faluade and Valerie Howard, will discuss some of the biggest challenges that divide sales and pricing teams and provide advice on how these important functions can work better together to accelerate sales cycles and deliver deals that are both a win for the buyer and the business.
About the Speakers
Loretta Faluade is a solution strategy director at PROS where she leads the development and execution of the go-to-market strategy for their sales transformation solutions. She is instrumental in helping organizations understand how to develop impactful digital transformation initiatives that transform the buying experiences for their customers. Prior to PROS, she worked as a sales and business development manager at Texas Instruments, where she held roles in both sales and marketing.
Valerie Howard is a data-driven marketer, passionate about pushing the bounds of using technology to work smarter and more effectively. She leads the go-to-market strategy for the PROS pricing portfolio, bringing leading data innovations to the market.
Valerie Howard: Thank you Nicholas and Bill for that insightful presentation on how businesses can successfully drive transformative change. Now I'm so excited to be here with my friend and colleague Loretta Faluade and we're going to speak about sales and pricing and how we can break down the walls that divide us. Now, I'm Valerie Howard, as I said, solution strategy director for PROS, and I've got an extensive background in pricing. I've done pricing for airline businesses and software businesses in the past, and I'm a super spreadsheet fan. And my colleague here, Loretta, she has a great background in sales as well....
Loretta Faluade: Yeah, so my name is Loretta Faluade, I'm also a solution strategy director at PROS and my background is in sales and I worked for a sales organization out in Boston for a couple of years. So I've worked with sales teams, understand some of the day-to-day struggles that we've had, so really excited to have this conversation around how we can establish better communication between both of us.
Valerie Howard: Absolutely. I will say as a pricing professional, I am always fascinated by the sales professionals, so really excited to explore how we can work and collaborate together. So the way we're going to talk through this session is we're going to break down a couple of myths that the pricing team has about sales. And I think Loretta is going to share a couple ...
Loretta Faluade: Absolutely.
Valerie Howard: ... myths she has about us on the pricing side. So this first myth that maybe it's a myth but it's a belief that the pricing team has is that sales teams they're focused on closing deals and the theory is that they will discount away all the profits just as long as they can win that deal. What do you think?
Loretta Faluade: Oh man. I like how you started off here. So one of the things that I used to think about when I was in sales is that I am the representative of the customer to the organization and when I'm with the customers, I'm the representative of the company to that customer. And part of what I would always have to try and figure out to do is how to balance both so that you're creating a deal that aligns with the challenges that the customer needs and is looking for and that's also a win for the company. So when it comes to discounting, I'm bringing in the perspective of the customer whether it's the pricing team, to my internal flex team to try to say, "Okay, here is what package we need to put together to really win this business for the customer."
Loretta Faluade: So with regards to the discounting away it's not that we're just looking to close the deal and just discount away all the profits. At the end of the day, you got to remember that we get paid on commission also, right? So if I win at a higher price, it also benefits me at the end of the day. So I'm trying to do what's best for the customer and also do what's best for the company and merge and marry both perspectives so that both entities felt like they were actually wonderful in that.
Valerie Howard: That makes a lot of sense. It sounds like you're having to do a lot of work to personalize that offer for that particular customer. But I do think the pricing team could help you to understand areas of value may be that are not initially apparent to the customer.
Loretta Faluade: Absolutely, and this leads me into one of the things that a lot of sales teams struggle with when they're having conversations with pricing. And it is that pricers don't really understand the nuances of the deal and they want you to sell something that's not there. So what would you say about that challenge?
Valerie Howard: Well, what I would say is that we all have only the capacity of our own human brain, right? Even a salesperson as charming as they may be only has the comprehension power to understand the client that's in front of them. And what a pricing person can do is actually bring the comprehensive perspective from all the analysis of the other sales teams members, as well as the market analysis. Sometimes they have access to competitive perspectives that perhaps are not readily available to the sales person. And then we talked earlier also about finding those areas where the customers might have unique perspectives on value, or maybe the customer isn't aware of certain attributes of your product line where they could find some unique value as well. The pricing professionals are really key to sharing that wealth of data with a sales professional and helping them to negotiate those deals and personalize to the unique needs. And sometimes even perhaps predict or anticipate some needs that the customer may not already be aware of.
Loretta Faluade: Yeah. And I love what you said about having data, because one of the things that you guys have is the data. We don't have the data and we're not looking at the data day in and day out and sometimes, unfortunately, we also don't have the time. So being able to communicate with you guys and really explain the nuances of the deal is very helpful in making sure that we can put together a package that actually works for the customer.
Valerie Howard: And that's such a good point too, because sometimes there's a lot more than just the data than what's tracked in our systems and what's tracked in our data systems. And there's two points to that in that a sales person's intuition is extremely valuable to understanding how you can personalize in new ways, but then even beyond that pricing person's spreadsheets as beautiful and intensive as those spreadsheets may be, pricing professionals capacity to interpret that data can only go so far. And with technology and AI, I think today's pricing teams are being able to see so much more, proactively anticipate how they can personalize offers for their customers.
Loretta Faluade: Yeah.
Valerie Howard: So my next theory about salespeople is that salespeople have trouble selling on value. They are often persuaded by their customers who will push them on price, push them to discount because perhaps they saw another competitor offer a lower price online or with the little detail they're trying to commoditize your offers.
Loretta Faluade: Yeah. So I'll say ouch, first of all, and I will remind you what you just said about a salesperson being able to provide some context, right? And so, here's the challenge. A lot of times sales teams are being asked to sell on value. You've got to sell our latest, greatest features and capabilities, but a sales person brings the context of that selling scenario and sometimes the value that we're looking to sell simply is not there because the customer does not need that specific capability or they have a simpler use case. So what a sales person is able to do is to provide the context to say, "Okay, here is what the customer actually needs." And if you remember, I think the greatest salespeople are those that actually can marry the needs of a buyer or a customer along with the products and services that that company is offering, right?
Loretta Faluade: And if you can find that bridge and make it to a place where the customer knows that you're meeting their needs, you're understanding them. And you're meeting them at the price that is beneficial to them, then that's when you actually get a chance to win the business. So with regards to selling value, I think that a lot of times pricers have got to remember that you're seeing data without context. And what we can do is we can provide a lot of context into the selling scenario and help you to figure out if there is value in an additional feature or an additional capability or an additional use case. And if there is, then absolutely, push on your sales teams to sell that value so they're actually getting a win for the company.
Valerie Howard: Absolutely. But I would advise pricing teams to push back on sales also, right? Because it's really important that we're collaborating in such a way that we are protecting our pricing and protecting our pricing integrity. Because that'll make that next deal that much easier to negotiate if there's a history of protecting that price, really, really being able to defend the value of your products each and every time. Because we know that when there's a lot of price variation in the marketplace, when perhaps one business sees that their peer business was able to receive a deep discount, then they're going to expect it next time and it propels itself in this ongoing discounting behavior. So it's really, really important that the salesperson is building that bridge with their customer but also building that bridge with our pricing teams so that they can protect that pricing integrity and hopefully make that value discussion a lot easier because there's a lot more consistency in the pricing across the market.
Loretta Faluade: Yeah. All right. So I've got another challenge. You're talking about pricing variation and pricing consistency. Well, one of the challenges that sales tends to have with pricing sometimes is that the first price is so high. It's not even in the ballpark of what the customer is willing to pay for. And so, I, as a Salesforce and I get the price and I'm like, "Really? Come on, man." I need you to work with me a little bit because the customer has given me this price. So what would you say about salespeople that have that perspective? Like, Oh, gosh, I got to go to pricing. They're going to give me a price that I know is not going to win.
Valerie Howard: Yeah. Well, I would say in those cases, a lot of that pricing behavior is based upon the sales behavior, the expectations of the buyer behavior as well. So in many cases it's not just that the pricing teams throwing out that high price because they're being ridiculous. It's because they have seen that buyers have gone through this process where they expect that price to come back high, where they expect to go through three rounds of negotiation. But I will say, definitely those behaviors are on the decline. We see more and more buyers shifting to digital channels, shifting to self-serve experiences, or perhaps shifting to those companies that are giving them that realistic price on the first go.
Valerie Howard: So, while that traditionally has been the behavior, that there will be lengthy negotiations, more and more of that behavior is on the decline. So that's why that price has traditionally been so high, but another viewpoint though as well, that's important to take into context is that as buyers shift to digital channels, they value that time saved so much more that they're actually willing to pay more for the frictionless easy, experience of a fast sale. So we've done some research and we actually found that buyers would be willing to pay as much as 5% more for a realistic price through online channels. So really, really great potential pricing improvement that you can gain there.
Loretta Faluade: Yeah, and I like what you said about the fact that people have learned behavior, because that's so true, right? If you go in with a super low price, what the buyer is going to end up doing is really just bringing you down from there. But I do see a lot of suppliers these days, or a lot of buyers that do want things to be realistic. So I love the idea of getting personalized pricing out to the buyers on the first go.
Valerie Howard: Yeah, absolutely. I mean, I would definitely say that buyers have an expectation for greater transparency today than they would have five years ago now that more and more sales are happening through digital channels as they want to work with vendors that can work with them through multiple channels today.
Loretta Faluade: Yeah, absolutely.
Valerie Howard: So the last myth that I have about salespeople is that they are just working off of their gut instinct all the time. Their charming behavior and their gut instinct is what drives them. Is that true? Because I mean, you're pretty charming yourself.
Loretta Faluade: I will agree with you that salespeople have to be charming. But I would have to say that when it comes to working off of gut instinct, there is a part of that that's true and that's why I think that it's so important to work closely with your sales counterparts. And that's because salespeople, unfortunately, don't have a lot of time today. A lot of sales people are spending their time managing administrative tasks and have to do research to figure a lot of things out. So when I'm looking at pricing or I'm looking at a deal, I'm looking at research, I might ask a colleague in the office who might be servicing a competitor of the buyer that I'm looking to talk to. And the end result is that I have to basically just feel it in the air and say, "Okay, I think that this is where we have to land," but I think between providing the context of the deal and doing some research and also the great data that you guys have, we can work together to put together a deal that's actually going to work for the buyers.
Valerie Howard: I love the way you said that. So what you're saying is that if they're working with their pricing team, they no longer have to work off of gut instinct.
Loretta Faluade: They don't have to work off of gut instinct because you guys have all the data and you guys have all the research.
Valerie Howard: Work with your pricing teams.
Loretta Faluade: All right. So the last one for us that I wanted to dig into is just the fact that sometimes it feels like when pricing is looking at a deal, like when we have an escalation that they're only looking at the deal at a point in time, they're not looking at the longevity or the potential opportunity for this customer longterm, what would you say about that?
Valerie Howard: Yeah, well, I would say push on those pricing people and show them the potential strategic value of that client. But then you also will have to expect that that pricing person is going to ask you to show them evidence that that is the case. Are there other clients like that that want that freemium deal today, but they've stayed on as a client for years and years to come, that's what they'll ask for in that case. But I think if you can make that case to them that there's significant lifetime value with that client, they can see that. They can run the numbers with you.
Loretta Faluade: Absolutely. Well Valerie, thank you so much. This was a great conversation. So we just talked about how you can break down the walls that are dividing both sales and pricing teams. Up next, we're going to have Robert Malenga talk about how both of these teams can work together so you can close fast on your RFPs, sales agreements and contracts.