Where’s the beef? Wendy’s famous commercial and saying is now 27 years old. For those of you who are too young to remember, or perhaps you lived outside the USA at the time, this was a classic commercial (you can look it up on YouTube.com). A little old lady, played by Clara Peeler, went around to other hamburger chains to buy hamburgers. At the sight of competitive burgers, which looked unappealing and lacking, she famously yelled – “WHERE’S THE BEEF?” Of course, the message was that these competitive burgers lacked beef and burger lovers should go to Wendy’s. It was such a successful commercial and tag line that Advertising Age named it one of the top 10 slogans of the 20th century.
So what does this have to do with pricing? While it’s a business-to-consumer example, it is a great reminder about the power of communications to frame value and influence customers. For most B2B firms, the sales force plays the critical role of communicating value and ultimately negotiating value with customers. Yet, they’re often not armed with the right messages, good tools, or the negotiating know-how to be successful. This is particularly true in the new era of the economic buyer, where highly-skilled procurement professionals often outmaneuver salespeople.
What can companies do? There are three simple steps to get a handle on the situation. First, conduct a messaging “audit” to determine the quality of the marketing messages and sales collateral. Companies often invest lots of time and money in developing collateral that is not used by the sales team, because it’s feature-based and not value-based (features provide facts/data about the product, not insights about the value it creates). Second, evaluate whether salespeople have the right skills and training to effectively negotiate with economic buyers. Finally, assess whether there are standard or best practice negotiation tools and tactics to help the sales team defend your value and prices.
Ultimately, good pricing isn’t just about having robust strategy and solid price management. These are necessary, but not sufficient. Companies need to recognize that the moment of truth in value exchange with customers is the salesperson’s framing of value, and the negotiation of value exchange with customers. Put some value communication and negotiation “beef” behind the sales team and your prices and margins will benefit.