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B2B Pricing – Please don’t do this.

I was reading through one of my emails last week, and came across an email from a person who aggregates articles, because one of my articles was on his website. Also on his aggregated website was an article from a sales woman, who had recently spoken at a sales conference.

One of the questions, she was asked, was about pricing software products and services. Below is her answer to pricing.

On pricing:
• What are your costs (fixed and variable) and how much margin do you need to make?
• What are your competitors charging for similar solutions?
• What will your customers pay?

Please, DO NOT use these old fashioned, unwise ideas. This concept used to be used by accounting and legal firms for hourly billing. It was a dumb idea then, and an even dumber idea in today’s connected world.

Instead, please DO THIS for B2B Pricing.

ALWAYS, ALWAYS, base your pricing on THE VALUE your products and/or services bring to your clients.

If you don’t know what the value is, there are two things I recommend that you do.
1. Talk to the owner/CEO of your company and ask him/her what value your company, and its products and services, brings to your clients.
2. Talk to your company’s best clients, and ask them what value they have received by using your products and/or services.

If you can’t sell value, your company will become extinct, unless you are the largest company in your marketplace.

An Example of B2B Value

Here is a short video explaining an example of value, and how many B2B companies make a mistake by not understanding the difference between ROI and payback.

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Ian DaintyKind regards,
Ian Dainty’s Email
Author of the Book – Grow Your B2B Business With Strategic Account Management

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