You Should Be Pricing Higher
You Should Be Pricing Higher
One of the most frequent questions from our clients and consultants is, “How do you think we
should price this?” The answer for both groups always start with the equation –
Price = Problem x Urgency
By focusing on the scale and impact of the problem on the customer’s business, it provides
clarity as to what the price should as related to value. Adding Urgency to the equation as a
compounder, there is a price for speed. If the prospect needs a big problem solved quickly, it is
more valuable to them, which should be reflected in the price.
Some years ago, we were qualifying a prospect for our BSF program. They are a national
manufacturer and distributor of medical supplies. They had been stuck at $50M in annual
revenue for the prior 2 years. Their goal was to triple their revenue over the next 3 years. Even
though they had what most of us would consider to be a large problem, they were concerned
about the possible fees we would charge. We pointed out that for the customer to achieve
their goals, a very large increase in their revenues for the first year and again in the second year
to achieve their goals in their third year would be necessary. If they waited to start their work
using our system, they would be pushing out the achievement of their goals by as many months
as it took to start. Our fees were significant, but once they understood their urgency was
almost as important to resolve as their problem, they chose to purchase and start immediately.
When working with prospects, start the conversation with the following questions:
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What do you consider to be your challenge?
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How do you calculate that? (Often, this is when you need to help them re-frame).
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When do you need this challenge resolved by?
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What happens if you don’t begin now?
Important Note: Re-framing is when you provide insights to your prospect as to how they should
consider the real problem they are facing and what its true size is.
If I were to re-write the equation, I would make this change:
Price = (Problem x Urgency) + Confidence
The final price is based upon their problem and its urgency, but that is impacted by their
confidence that you can solve it. If you change their understanding of the impact of problem
and urgency on the value pricing you are offering but they are not confident you can solve it;
you have just set the value pricing for whoever they have confidence can solve it.
Price is not set by budget. If it is, then you are bidding rather than selling. If what the customer
wants has been defined by them, it is not a problem, it is a commoditized purchase. Focus on
finding problems and framing their size and urgency, which will lead you to the value price to
charge.
About the Authors
📌 Tom Searcy, CEO & Founder of Hunt Big Sales, is a nationally recognized expert in large account sales. By 40, he had grown four companies from $10M to over $100M without acquisitions. A top-ranked speaker at Inc. Magazine, Vistage International, and more, he was also named #1 on Global Gurus’ “Top 30 Sales Professionals for 2023.” This is his sixth book.
📌 Carajane Moore, President & Partner at Hunt Big Sales,has helped businesses land billions in new revenue across industries like medical devices, tech, aviation, and construction. Recognized as a leading woman in business, she’s been featured in O, The Oprah Magazine, Entrepreneur, Fortune, and Forbes.