3
The 20 business development pricing tools, truths and techniques 33
Winning the business at any cost is not a great business development
strategy. Do this and you risk not having a business to develop.
2. Price is a communications issue, not a
nancial or accounting one
While this may seem basic to many readers, I have genuinely been into
many businesses where pricing was perceived essentially as an accounting
and nance function. The nance people would get their calculators
cranked up, work out their xed and variable costs, add on their pre-calcu-
lated, targeted prot margins and the pricing job was done for ever. Seems
straightforward, doesn’t it?
While we know the lifeblood of a business is covering costs and making a
prot, I want to stress that if you learn appropriate pricing and charging
communication and inuencing skills, and adapt some of the ideas in this
chapter, your prot margins can be much, much greater than those tar-
geted by your ‘numbers’ people.
3. Focus on value and service and not just price
Stop thinking for a second about your ‘sales’ strategy and start to think
about the prospective customer or client’s ‘buying’ strategy. Imagine that
in considering whether to buy from you or not, it is as if they had a set of
scales in their mind, with them consciously or unconsciously weighing up
and balancing all the relevant factors.
On one side of the scales are the value and service elements and these are
constantly being weighed against the other side of the scales . . . the price
side. This is the value v. price scales™.
To get good protable prices and fees for your goods and services, what you
must strive for is to pile as many ‘weight blocks’ onto the value and service
side of the scales as possible. The more of these there are, the more they
inuence the prospect to actively want to buy your product or service at
the price you want to charge and the more it minimises the inuence and
importance of price in the prospect’s mind.
If you doubt this, let me ask you a question. After a purchase you have
made, have you ever said to yourself or others, ‘I could have got it cheaper
elsewhere, but . . .’ and then gone on to justify why you bought something
34 The Financial Times Guide to Business Development
that was actually more expensive? The ‘but’ reasons you give in these
situations will be the ‘weight blocks’ of the products or services of the busi-
ness you bought from and the fact that they communicated them to you
effectively.
In practice, then, what do you need to consider and do in your business?
Forgive the ambiguity . . . the answer is . . . get a big but!
You must attempt to build up as many ‘weight blocks’ as possible before you
give or present the price or discuss fees.
What this means in practice is that your ability to get a prospect to buy at
the price point you want will be totally determined by your ability to com-
municate and pile on as many ‘weight blocks’ as possible. Whether your
marketing and business development initiatives are on the web, in hard
copy or involve face-to-face sales conversations, your overriding aim must
be to get prospects into a state of such desire for the product that they are
prepared to pay your price and feel good about it.
So what sort of things constitute ‘weight blocks’ that can create this level
of desire?
Well, there isn’t any one thing in particular, or even an exhaustive list.
A ‘weight block’ can be either tangible or intangible, but ultimately it is
something that will inuence the prospect consciously or unconsciously
to actively want you, your organisation or your product at the price you
determine you deserve. In many cases you can assume, if they buy the same
product or service from someone else cheaper, it is because you haven’t
piled on enough ‘weight blocks’ and communicated with them strongly
enough to make them buy from you at your price.
The challenge for you, therefore, is to come up with and use as many
‘weight blocks’ that relate to your business, products or services as possible
and get prospects positively lusting for your goods or services before they
hear your charges.
Let me just give you a feel for a few things that might constitute possible
‘weight blocks’ in your business:
your track record, experience or results – use numbers to illustrate;
include lots of features and benets into the price package;
local convenience;
testimonials or recommendations from other customers or clients;
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