You have been working on a deal for about four months and are approaching the end. Negotiations are underway, redlines are feverishly being exchanged, and pricing pressure is at its' highest. To bring the deal in, you drop the price, increase the discount beyond your manager's approval level, and have to get CEO approval. How could this have been prevented?
Without a solid, defendable metric, your price cannot be justified. - Wayne Johnson
Remember, the metric is a dollar value bound by time. Once you have a metric, you then validate it and get a consensus among your buyers on those metrics. This metric now becomes the defense of why you charge what you charge. You have to make sure you gather two categories of Metrics.
General Solution Metrics - These metrics support the narrative that the pain that they are experiencing is worth solving due to the supporting metrics. This enables you to combat pricing pressure against a do-nothing decision.
Differentiation Metrics - By this time in the sales process, you should have clearly defined your differentiation from the competitors. These differentiations must have a clear metric tied to them. This metric category will help you combat pricing pressure against a decision for the competition.
Without a solid, defendable metric, your price cannot be justified. The #1 Discount Killer is having your metrics buttoned up. Think of your current opportunities. Do they each have metrics? Do they have both general solution and differentiation metrics? Do your metrics support your pricing? If not, keep digging.
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