How to Do Pricing For Enterprise Sales - Presentation by Jim Geisman at the NASSCOM Product Conclave

233 Needham Street • Suite 300 • Newton, MA 02464 • (508) 647-0330

NASSCOM Product Conclave

How to Do Pricing For Enterprise Sales

Jim Geisman

Founder & Principal

Software Pricing Partners, Inc.

© Software Pricing Partners, IncAll Rights Reserved

- 2 -

Many dimensions to Pricing

Pricing model affects enterprise sales – a lot

Keep packaging, pricing, discounting simple

Develop a framework for doing enterprise sales

Key Takeaways


- 3 -

Building enterprise salescan be like building a home…

… you can spend a lot of time at both


- 4 -

Many Would Like to Live Here


- 5 -

Or Maybe Here


- 6 -

Or Here


- 7 -

But Often Wind Up Here


- 8 -

Or Here


- 9 -

What Does This Have to Do With Pricing and Enterprise Sales?


- 10 -

Good product

Careful construction

Solid foundation

Robust design

Ability to scale

Planning in advance

Pricing an Enterprise Sale Relies on…


- 11 -

Design for specific situation

“Good enough” configuration

“Solid enough” Ts & Cs

Limited follow-on sales

Hard to extend or apply elsewhere

Pricing an Enterprise Sale May Mean


- 12 -

Look shaky

Weak platform for future

Haphazard design

Unintended consequences

Limited life

Poorly Priced Enterprise Deals


- 13 -

Pressure to respond

Thrown together

Poor customer fit

Doesn’t work well

Gets uglier over time

Failures in Pricing Enterprise Sales


- 14 -

Getting Calibrated

Pricing Model Overview

Drilldown – Structure

Drilldown – Details

Pricing and Enterprise Sales

Parting Thoughts

Topics


- 15 -

Sophisticated B2B or “B2BC” use Not an impulse buy

Custom configured deliverables Used throughout “enterprise”

Usually sold face-to-face Pricing is not transparent

Can be on-premise or hosted

Often started on the web as a trial

Typical Products In Enterprise Sales…


- 16 -

Prospecting is difficult

Slow response to RFP / RFQ

Long sales cycles

Excessive discounting

Living with a bad deal

Common Enterprise Sales Problems


- 17 -

Getting Calibrated





Parting Thoughts

Topics


- 18 -

Pricing Model Is Not “The Number”

Price Level

Payment Timing

Customer FocusDelivery

Packaging

Rights to Use Product Access

Quality

ServicesTechnology

Discount Structure Value MetricRelationships

Discounts


- 19 -

Pricing Model In Perspective

Business Model

Revenue

Cost

Revenue Model

CustomerAcquisition

CustomerRetention

Pricing ModelPrice

DetailsPrice

Structure


- 20 -

Pricing Model Framework

DetailsDetailsPricingPricing

StructureStructureTransactionTransaction

StructureStructureLicensingLicensing

Target Market & Customers

Implement & Maintain


- 21 -

DetailsPricing

StructureLicensing

StructureTransaction Available

Packages

ListPrices

ValueMetric

Pricing Model Framework - Details

LicenseModel

LicenseModel

DiscountSchedules

DealPricing


- 22 -

Pricing Model Levels

Licensing Structure

StructureLicensing

DetailsPricing

StructureTransaction

LicenseModel

LicenseModel

ValueMetricValueMetric

What is charged forHow prices scale

Rights to use, deployPayment stream and term


- 23 -

StructureLicensing


PackagesDiscount

Schedules

LicenseModel

ValueMetric

Editions, bundlesProducts and services

Scheduled discountsPromotional discounts

DetailsPricing


Transaction Structure


- 24 -

DetailsPricing

StructureLicensing


PackagesDiscount

Schedules

ListPrices

DealPricing

LicenseModel

ValueMetric

Price listPricing display

Negotiated structurePrice, Ts & Cs


Pricing Details


- 25 -

Pricing Model

Customer Understanding Is Key

Customer Usage

& Understanding

Market & Competitive

InformationDetailsDetailsPricingPricing

StructureStructureTransactionTransaction

StructureStructureLicensingLicensing


- 26 -

Getting Calibrated





Parting Thoughts

Topics


- 27 -

DetailsPricing

StructureLicensing


PackagesDiscount

Schedules

ListPrices

DealPricing

LicenseModel

ValueMetric

Licensing Structure

Value Metric


- 28 -

Value Metric

Align Metric with How Value Scales

Value Metric = What you charge for Critical, fundamental Easy to understand and estimate

Depends on how product will be used Personal vs. group use Transaction vs. continuous use Occasional vs. frequent use

Scales with value delivered People Per user Deployment Per instance Interaction Per transaction


- 29 -

Value Metric

Many Different Types

CRM per sales rep RightNow

Developer tools per person CogHead / SAP

Stock trading per trade/share Archipelago

Credit processing % of transaction Verisign

Survey per survey Zoomerang

Check scanning per check Kodak

Network management per device OpenView

Insurance per policy Allenbrook

SW asset management % of revenue Flexera

Bandwidth/data transfer per GB ISP’s

Direct mail mail list size ConstantContact

Per user

Transaction

Usage/capacity


- 30 -

Value Metric

Business Alignment Crucial

+++++++++++++++++++++++++++++++++++++++++++++++++++++

+++++++++++++++++++++++++++

Horizontal and vertical markets Sometimes aligned

per loan +++per patient +++per user ++per user ++per user +++per property +++per user +per student +++per user ++per customer +++per user +++per user +++per patient +++per employee +++per user +per user ++per claim +++per bill +++per gallon of fuel +++per patient +++per shareholder +++per user +++per employee +++per user +per ad +++per property +++per user +per reservation +++per employee +++per member ++per user +per user +per user +

+++++++++++++++++++++++++++++++++++++++++++++++++++++

+++++++++++++++++++++++++++

Vertical markets Aligned w/ customer’s business

per adper billper claimper customerper employeeper employeeper employeeper gallon of fuelper loanper patientper patientper patientper propertyper propertyper reservationper shareholderper studentper member

per userper userper userper userper userper userper userper userper userper userper userper userper userper userper user


- 31 -

Value Metric

Infrastructure Metrics Are Tricky

Source: Scio Consulting

Infrastructure

Application

Support DifferentVendors & Apps

End-User-Facing


- 32 -

Value Metric

Application Considerations

Mature applications Dominant vendor sets metric Customer expectations set? Need good [business] reason to change

Horizontal & infrastructure applications No best fit May need to find compromise

Niche applications Choose one that fits best


- 33 -

DetailsPricing

StructureLicensing


PackagesDiscount

Schedules

ListPrices

DealPricing

LicenseModel

ValueMetric

Licensing Structure

License Model


- 34 -

License Model

License Model vs. License Agreement

License Agreement• 1. Definitions• 2. General Terms • 3. Licenses

3.1 Rights to Use • 4. Services• 5. Fees and Payment 5.1 Software License Fee. 5.3 Support Services Fees. 5.4 Reinstatement Fee.5.5 Professional Services Fee 5.6 Payment.5.7 Taxes. 5.8 Fee Adjustments. 5.9 Audit Rights. • 6. Term and Termination6.1 Term. • 7. Proprietary Rights.• 8. Confidential Information.• 9. Warranties• 10. Limitation of Liability. • 11. Indemnification• 12. General

Price Levels

Value Metric

The “Offering”

Payment Stream

License Duration

Rights to Use(and Deploy)

License Model


- 35 -

Rights to Use and Deploy

Make “Boundary Markers” Clear

Access rights When How long

Usage location Physical vs IP address Time zone Geographic region

Deployment location Physical Virtual

Compliance Monitoring / Audit Administration


- 36 -

License Model

Value Delivery vs. Payment Stream

Value Delivery “Stream”

0%20%40%60%80%

100%120%

1 2 3 4 5Year

% V

alu

e

An

nu

al

Fe

e

(% P

erp

etu

al R

TU

)

M & SLicense / RTUSet Up

0%20%40%60%80%

100%120%

1 2 3 4 5Year

License / RTUM & S

0%20%40%60%80%

100%120%

An

nu

al

Fe

e

(% P

erp

etu

al R

TU

)

1 2 3 4 5Year

Subscription Payment Stream

Perpetual Payment Stream


- 37 -

License Duration

License Term Considerations

Related to payment stream

Depends on change in application, use

Annual and shorter-term An option? (vs. perpetual) Includes RTU and M&S?

Multi-year Can apply to RTU and/or M&S How long? Price protection typical


- 38 -

DetailsPricing

StructureLicensing


PackagesDiscount

Schedules

ListPrices

DealPricing

LicenseModel

ValueMetric


Available Packages


- 39 -

Available Packages

Consider the Future

Company direction Customers and “strategic direction” Offering roadmap – product and services

Product structure evolution Product variation – editions, bundles, licenses Options – Ins / Outs

Partners Channels International

Logistics Provisioning Billing


- 40 -

Available Packages

Assemble the Package

Need clear picture of customer Use cases addressed Most vs. least important benefits

Identify functions that fit with benefits How are functions related? What functions are popular? Which functions will customers pay more for?

Narrow the packaging choices Breadth of appeal Range of value Separate items


- 41 -

Available Packages

Use an Evaluation Framework

Usage versus Value

Value in Use

Usage Frequency

Must Haves Features

OptionsNo Value-Add

Low High

Low

High


- 42 -

Available Packages

Develop Driver Products

Product Line

Product Product Product

Product

Option Option

Product Portfolio

Product

Edition Edition Edition


- 43 -

Available Packages

Develop Configuration Framework

Base

Core

Solns

Adds


- 44 -

Available Packages

Avoid Complex Product Structures

SA

Network

Network+

Network 2

Network3

NetwkSite

NetwkU

Sub Network+

Sub Network 2

Sub Network3

Sub NetwkSite

Sub NetwkU

U_1SA

Sub Network

U_ Network+

U_ Network 2

U_ Network 3

SubSA

U_2SA

U_ NetwkSite

U_NetwkU

AC-L/M/SNetSt

SubAC-L/M/SNetSt

SA

Network

Network+

Network 2

Network3

NetwkSite

NetwkU

Sub Network+

Sub Network 2

Sub Network3

Sub NetwkSite

Sub NetwkU

U_1SA

Sub Network

U_ Network+

U_ Network 2

U_ Network 3

SubSA

U_2SA

U_ NetwkSite

U_NetwkU

AC-L/M/SNetSt

SubAC-L/M/SNetSt

2-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1

-

-

-

-

1

Drivers

10SubSA

1SubNetSit

8291SubASNtSt

1SubAMNtSt

1SubALNtSt

1AcSmNetSt1AcMdNetSt

1AcLgNetSt

75U_2SA

31U_2NetwkU

59U_2Netwk+

68U_2Netwk

75U_1SA

31U_1NetwkU59U_1Netwk+

68U_1Netwk

1SubUserLk

9SubNetwkU

9SubNetwk3

9SubNetwk2

10SubNetwk+

10SubNetwk

31NetwkU5NetwkSite

30Netwk3

30Netwk2

59Netwk+

68Netwk

75SA

CountLicense

2-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1

-

-

-

-

1

Drivers

10SubSA

1SubNetSit

8291SubASNtSt

1SubAMNtSt

1SubALNtSt

1AcSmNetSt1AcMdNetSt

1AcLgNetSt

75U_2SA

31U_2NetwkU

59U_2Netwk+

68U_2Netwk

75U_1SA

31U_1NetwkU59U_1Netwk+

68U_1Netwk

1SubUserLk

9SubNetwkU

9SubNetwk3

9SubNetwk2

10SubNetwk+

10SubNetwk

31NetwkU5NetwkSite

30Netwk3

30Netwk2

59Netwk+

68Netwk

75SA

CountLicense Driver Product


- 45 -

Available Packages

Easy-to-Understand Presentation

Functional Overlap

Options

Obvious Differences


- 46 -

DetailsPricing

StructureLicensing


PackagesDiscount

Schedules

ListPrices

DealPricing

LicenseModel

ValueMetric


Discount Schedules


- 47 -

Discount Schedules

Discounting Overview

Discounts are incentives Encourage specific buying behavior Pay for performance not promises

Two types of discounts Scheduled discounts

• For qualified customers*• Standardized• Broadly applied• Easy to administer

Negotiated discounts• Part of deal pricing• Ad hoc• Response to competitive pressures• Should address strategic needs

* Includes end customer, distributor, VAR, reseller


- 48 -

Discount Structure

Typical Volume Discount

Tiered Discount Schedule

$-

$500

$1,000

$1,500

$2,000

$2,500

0 100 200 300 400 500

Unit Volume

Pri

ce

pe

r U

nit

Tiered Discount Revenues

$-

$50,000

$100,000

$150,000

$200,000

$250,000

0 250 500 750 1000 1250 1500

Unit Volume

To

tal

Pri

ce


- 49 -

Discount Structure

Desired Result

Tiered Discount Revenues

$-

$50,000

$100,000

$150,000

$200,000

$250,000

0 250 500 750 1000 1250 1500

Unit Volume

Tota

l Pri

ce


- 50 -

Discount Structure

Keep Revenues Continuous

Buy more, pay more


- 51 -

Discount Structure

Start With Continuous Discounts

Orderly roll-off

Buy more, pay less per unit

Increasing tier width


- 52 -

Discount Schedules

Different Types of Discounts

Discount Type Objective

Volume-based Increase unit or dollar volume

Introductory Accelerate new product uptake

Time-limited Purchase sooner

Contract length Longer commitment

Bundle Increase transaction value

Upgrade Trade-up, upsell

Segment focused Industry, customer type


- 53 -

Getting Calibrated





Parting Thoughts

Topics


- 54 -

DetailsPricing

StructureLicensing


PackagesDiscount

Schedules

ListPrices

DealPricing

LicenseModel

ValueMetric

Pricing Details

List Prices


- 55 -

Price Levels

Value-Driven Price Level

Metric scales with value

Price level related to economics

Adjusted based on several factors

Metric Amount

Value Delivered

-PricePaid


- 56 -

Common Perception vs. Reality

Price

Etc.

Reality: Price is #3 or 4 in importance


- 57 -

Price Levels

How to Set Price Levels

Select a driver product

Set price for driver product based on... Customer value Competition Costs (for viability)

Set other prices relative to driver

Adjust to market and strategy


- 58 -

Price Levels

Typical Product Line Pricing

?

?

?

$

Customer value

SubstitutesCompetitionEconomics

Costs

$

Functionality


- 59 -

Price Levels

Simplify Pricing and Decision-Making

1260

466

23

11

36

220

308

94

Other

827

466

-

6

36

58

187

74

Other

431

-

23

5

-

162

221

20

Other DriverDriverDriver

2

-

-

1

-

-

-

1

Academic

136134Total

--U Licenses

2323NodeLk / UserLk

43Network Site

11Site & Unlimited

11Subscriptions

11Network

106105Stand Alone

TotalIndustrial

1260

466

23

11

36

220

308

94

Other

827

466

-

6

36

58

187

74

Other

431

-

23

5

-

162

221

20

Other DriverDriverDriver

2

-

-

1

-

-

-

1

Academic

136134Total

--U Licenses

2323NodeLk / UserLk

43Network Site

11Site & Unlimited

11Subscriptions

11Network

106105Stand Alone

TotalIndustrial

Direct, North American, V8 Licenses


- 60 -

Price Levels


Select a base product

Set price for base product using...

Customer value Competition Costs (for viability)

Set other prices relative to base



- 61 -

Customer Value

Monetize Impact

Hard Dollar Impact of Better / Faster / Cheaper

Time to Value

SolutionPrice

Current solutions

Faster

Cheaper

Better


- 62 -

Customer Value

Understand Customer Business & Use

Different customer types Distinctly different Different view of value

Customer view of business Revenues, growth, profits Customer acquisition, retention People, product, production

Problems being solved Means, methods, processes Where product fits Different segments

What drives revenue?

Customer Research & Understanding

Market & Competitive Information

LicensingStructure

PricingDetails

TransactionStructure


- 63 -

Customer Value

Economic Driver Examples

Increase revenue Faster time to market Accelerate revenue Increase number of customers Increase size, frequency of orders

Decrease costs Less downtime Save labor, material Fewer rejects, errors Less training

Avoid costs Defer expenses Slow growth in expenses Delay / non-use


- 64 -

Customer Value

Assessing Economic Impact

Revenue Impact Increase Accelerate Sustain

Cost Impact Decrease Defer Avoid

Timing• Occurrence• Duration

Risk• Predictability• Failure

Associated Costs• Out of Pocket• Opportunity

Other Considerations


- 65 -

Customer Value

Associated Costs

Product acquisition One-time vs. ongoing

Process changes Conversion time, costs

• Facility changes Training Lost time

Management time

Perceived risks Failure Loss of control, job

Lost opportunities, options


- 66 -

Customer Value

Show Your Value Add

Units

Money

Group comm

Deal speed

Lead mgmtClose rate

Unit costs

Fixed costs


- 67 -

Customer Value

Product Uniqueness Has Unique Value

UniqueValue Adding

Features

Base (Common)Features

How Much Is Difference

Worth?

MarketPrice


- 68 -

Customer Value

Customer Feedback Can Be Useful

Focus on value delivered

Available alternatives, substitutes What is good / not Information about competition

Pricing perceptions Alternatives, substitutes Competition? Your company?

“Fair” price to pay for delivered value NOT “fair price to pay for my product” Don’t ask direct questions


- 69 -

Price Levels








- 70 -

Competition

Don’t Be Driven By Competition


- 71 -

Competition

How Important?

Inertia toughest competitor Cost and impact of change

Incumbent always has edge Need significant advantage

Understand competitor differences Company Product Strategy Resources Pricing competence

Be mindful of competition Don’t follow blindly


- 72 -

Following the Competition Is Risky


- 73 -

Price Levels








- 74 -

Costs

Costs to Develop, Maintain, and Deliver

Customers care about Value delivered Commitments kept

Customers don’t care about Your costs Your ROI

Your costs reflect Strategy Management Procurement


- 75 -

Costs

Viability Testing – Example

Sales& Mktg

ProductDevpt

ProfitGenl

& Admin

Package

NetPrice

Quantity

Customer

Revenues

Modules ProspectsMargin

4,000$250

$1M

$400K$250K

$900K

$50K $200K


- 76 -

Price Levels








- 77 -

Relative Prices

Not Just “Other Price Points”

Customer value extraction is key Price based on package value

All price points count Price steps Relative prices

Watch relative value and prices Features vs. add-ons Premium price for premium value


- 78 -

Market / Strategy Adjustments

Adjust Value-Based Prices

Category lifecycle Customer maturity / experience

Competition Numbers, strengths

Economic conditions

Company goals Resources Distribution

Pricing strategy Premium Parity Penetration


- 79 -

DetailsPricing

StructureLicensing


PackagesDiscount

Schedules

ListPrices

DealPricing

LicenseModel

ValueMetric

Pricing Details

Deal Pricing


- 80 -

Pricing Details

Deal Pricing

Applies only to “Big” Deals Define “Big” for company not rep Top 5 – 10%

Configure deliverables Scheduled discounts to start Iterate to final configuration

Package the deal Deliverables Ts and Cs

Negotiate the deal Price related Value-related


- 81 -

Deal Pricing

Can’t Manage “Discretionary” Pricing

… When it comes to the prices we pay, we study them, we map them, we work them. But with the prices we charge, we’re too sloppy.

An analysis of [appliance pricing] found out that about $5 billion of it is discretionary. … there may be $50 billion … that few people are tracking or accountable for.

Jeff Imelt, CEO, GEInterview, Harvard Business Review June 2006


- 82 -

Negotiated Discounts

Often Significant – Rarely Tracked

Discount Waterfall200X Transactions - Software Only ($000)

$13,391

$3,743

$2,288

$3,027$22,449

$0

$5,000

$10,000

$15,000

$20,000

$25,000

Value atCommercial

List Price

$19,422

$17,135

Net ofGovernment/GSA

DiscountsNet of

ScheduledDiscounts

NetRevenue

Gov/GSADiscounts

ScheduledDiscounts

NegotiatedDiscounts

21%


- 83 -

Negotiated Discounts

Inconsistent (Unfair?) Deals


- 84 -

Getting Calibrated





Parting Thoughts

Topics


- 85 -

Prospecting is difficult

Slow response to RFP / RFQ

Long sales cycles

Excessive discounting

Living with a bad deal


LP

VM

AP SD

LM


- 86 -

Prospecting is difficult Unclear value (and target)

Slow response to RFP / RFQ Hard to configure deal

Long sales cycles Complicated pricing

Excessive discounting Negotiations

Living with a bad deal No process


VM

LP


- 87 -

Difficult Prospecting

Revenue Impact Value Prop

Accounting package Save time

Customer service application Lower cost per call

Development toolkit Save development time

Or… Collect money 10-15 days faster

Or… Retain customers 5-10% longer

Or… Get to market 4-6 weeks earlier


- 88 -

Difficult Prospecting

Economic Impact - Example

Economic impact of Feature 1 More development output ($15-25K/year) Shorter time-to-benefit ($50-100K/year) Start further down “learning curve” ($5-10K/year)

Economic impact of Feature 2 Lengthen useful life of applications ($12-25K/year) Improved application reliability ($3K/year) Improve “institutional memory” ($30K/year)

Collateral impact of Feature 2 Lower support costs ($???) Lower exposure to risk ($???)

Total economic value $100-200K/year Should be 5-10X product price


- 89 -

Prospecting is difficult Unclear value






AP SD

VM


- 90 -

500 SKUs 80 products

4000+ SKUs 140 products

Slow Response

Complicated Product Structure

All SKUs (42,000)

less pre-V8 (12,900 ) and “Anomalies” (2,200)

V8 SKUs (27,000)

less Currency Variations (2/3 total)

North American, V8 SKUs (9,000)

less Distributor Variations (1/2 total)

Direct, North American, V8 SKUs (4,500)

less Maintenance, Renewals, and Reinstatements (3,100)

Direct, North American, V8 Licenses (1,400)

Vs.


- 91 -







LP

AP SD


- 92 -

Long Sales Cycle

Rationalise Price Points

Driver Products Priced Under $10K114 Products 14 (versus 37) Price Bands

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

GES-AUTASAPI

NMR-H

NMRPDBA

STR-CHM

CODDK

NMR-H

NMRDBAD

NMR-N

NMRPDBA

NMR-C

NMRPRED

ILA-H

NMRPDBA

PHY-SOLU

BIDB

NMR-N

MR2D

MAN

CRV-CURVEM

AN

NAM-N

AMEPROF

UVI-UVIR

MANA

ILA-H

NMRDBAD

ILA-P

KADB000

CHR-CHROM

GEN

MAS-M

SPROCES

UVI-FDM

DDRUG

NMR-N

MR2D

PRO

UVI-FDM

RMKT1

UVI-NIS

TIRDB

PHY-BOIL

INGP

UVI-FDM

IRKT1

ILA-L

OGPDB00

GES-AUTHNM

RV

ILA-N

AMIN

DEX

ILA-N

AME2S

TR

GES-WEBLI

WBS

UVI-FDM

DMIN

E

NMR-N

MR2D

PR1

UVI-FDM

DPOLY

ISI-I

SISHOST

UVI-UVIR

PROC

ISI-I

SISUNAM

GES-AUT1D

NMR

GES-AUTCRVM

G

GES-AUTX2P

DF

CHR-XAPPDBAD

ISI-I

SISDRAW

Lic

en

se

Pri

ce


- 93 -

Long Sales Cycle

Rationalise Discount Schedules

Max Quantity SANet Add'l Seats Fixed NdsUs Subsc Onlin NUNam NUPro NUDBP

0 0%

2 5%

3

4

5

6 15% 50%

11

16

21 25%

31 30%

41 35%

51 40% 75% 75% 70%

100

101

200

201

300

301 55% 90% 90%

401 60%

501 65%

1001

999999999999.9

Total

Number SW Products 1,394

Applicable Discount Schedule

995 ? 119 ? 10 6 223 40 1 - -

20%

30%

10% 35%40%

40%

60%

55%

70%

80%

70%

60%

60%

65%

45%

65%70%

50%

0%

50%

0%

25%

50%

60%

0% 0%

50%

60%

85%

90%

95%

80%

85%

95%

70%

0%

25%

50%

60%

75%

80%

0%

50%

60%

70%

75%

80%

85%

95%


- 94 -




Excessive discounting Drawn-out negotiations



LP

AP SD


- 95 -

Excessive Discounts

Measure Discounts


- 96 -

Excessive Discounting

Packaging Can Help Negotiation

Packages

Options

$

Functionality


- 97 -

Excessive Discounting

Give Customer a Choice

$

Functionality

Get morePay more

Pay lessGet less

Get morePay less


- 98 -

Excessive Discounts

Focus on Amount of Concession

Narrow the Gap


- 99 -





Doing bad deals No process


LP DP

AP SD

LMVM


- 100 -

Doing Bad Deals

Improve Deal Quality

Avoid ad hoc case-by-case evaluations

Categorize deals Create deal “buckets” Minimum qualifications

Clearly labeled categories Big single transaction Multi-year, multiple transaction AYCE, site deals Uncertain need/usage

Assess deal quality


- 101 -

Doing Bad Deals

Fast Approvals for Qualified Deals


- 102 -

Getting Calibrated





Parting Thoughts

Topics


- 103 -

Parting Thoughts

Pricing Is Critical to Enterprise Sales

Negotiate& Close

Package the Deal

Price Levels

Packages

Discounts

License

Metric

Configure

Present


- 104 -

Revenue Impact Increase Accelerate Sustain

Cost Impact Decrease Defer Avoid

Timing• Occurrence• Duration

Risk• Predictabilty• Likelihood

Associated Costs• Out of Pocket• Opportunity

Other Considerations

Parting Thoughts

Make Revenue Impact Primary Value


- 105 -

Parting Thoughts

Maintain Pricing Discipline

Keep pricing easy-to-understand Makes sense Transparent

Stay aligned with customer value Clear value prop Related to business drivers

Follow a pricing process Do pricing systematically Periodic pricing reviews / updates

Enforce price and discount policies Provide sales tools, training Make pricing easy to administer


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Prospecting is easier

Fast response to RFP / RFQ

Shorten sales cycles

Get more from discounting

Avoid doing as many bad deals



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What It Takes to Succeed

Pricing

Technology Execution


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Thank You

Jim Geisman+1 508-647-0330

[email protected]


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Revenue Impact of Price Sensitivity

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Demand & Revenue Forecast


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How to Do Pricing For Enterprise Sales - Presentation by Jim Geisman at the NASSCOM Product Conclave

Technology

Transcript of How to Do Pricing For Enterprise Sales - Presentation by Jim Geisman at the NASSCOM Product Conclave