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What Pricing Authority Should Salespeople Have?

Views: 5403

Companies have various approaches when it comes to the authority given to salespeople when setting client pricing.

Some offer the salespeople no authority on pricing and the management team sets the price on every deal.

Other companies provide salespeople pricing tiers that salespeople must stay within.

A third way this is handled is that companies offer their salespeople tremendous latitude for client pricing.

What pricing authority should salespeople have ? Are there factors (i.e., industry type, product type, business size, salesperson tenure, etc.) that affect your recommendation?

  • markallenroberts

    Great Topic,
    Product pricing is actually a marketing role.
    Assuming they have done the market work prior to launch they should tell sales the price strategy. If your price is higher they should also provide the value proposition that justifies it.

    As we have discussed though, that’s a perfect world. As salespeople we are often asked to ” just make it happen” and time kills deals.

    If marketing does not do the market work you are basically asking your salespeople to “sell naked” http://www.nosmokeandmirrors.com/2014/03/24/increase-sales-and-profits-stop-asking-your-salespeople-to-sell-naked/ .

    If you lead a sales team and marketing has not provided you current market data and the strategy of price, I do some quick data gathering and provide my feet on the street a range to move if needed based on specific criteria.

    Mark Allen Roberts
    Expert Panel
    http://www.nosmokeandmirrors.com

  • Jim Vaughan

    Pricing authority is always the $64k question. Having run Pricing and also Sales, I believe the answer lies somewhere in between. If you just give pricing floors the average sales person will go right to the floor to make the sale. Taking the path of least resistance. Give them no authority or flexibility, you risk losing sales. Empower them, compensate them and manage them to selling for the best price / margin but give them a floor level that they know they can go to in order to close a deal on the spot.