How To Do Pricing Right: Changing Prices

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Jun 192010
 

After you have defined your pricing based on the value of your offering (see previous post on the topic), at some point you will think about changing prices. Unfortunately most start-ups come to that point too soon and too often they think only about one direction to go for their prices – down. The reason behind it is that most Sales Executives believe lower prices will help them sell more. Well, that is usually true if you only look at the number of quantities, but in most cases you want to increase revenues, not quantities. To understand the interrelationships between price, quantities and revenues let’s have a look at the demand curve. The demand curve … Read more

BP – Effective Branding?

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Jun 102010
 

There was an interesting article yesterday in Harvard Business Review, stating that BP’s strong fall in popularity this year has been accelerated by their previous, multi-million dollar attempt to position themselves as a “green” company (“Beyond Petroleum”) implying that they do more than other similar companies to achieve higher environmental standards. However, they seem to have failed to deliver on that promise and have not, as the authors put it, “aligned identity and strategy.” To view the HBR article click here: The BP Brand’s Avoidable Fall As I outlined in my post from 28 Feb., branding activities (which are usually comparably expensive for any company) become quite ineffective if you make a brand promise that … Read more

How To Analyze Your Sales Funnel

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Apr 102010
 

As described in my previous post, the historical funnel development shows how the opportunities transit to the next sales stage. Therefore, how many opportunities make it to the next stage determines the shape of the historical funnel. This shape can be visualized and can be compared with some typical shapes that I identified in my experience: I differentiate between three main funnel development shapes: Cone, Bottle, and Tube. These idealized shapes characterize the funnel development and can be used to compare with your actual funnel development shape. The Cone shape is considered to be the ideal shape. Such a shape means that there is a more or less linear screening out of some opportunities in … Read more

Forecasting Your Sales

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Mar 272010
 

In Sales, you are dealing with probabilities for closing deals. You will never win 100% of your prospects as customers. This is important to remember when it comes to sales forecasting. Therefore, at the beginning a few basics regarding probabilities: Chance or accident we usually call something for which we don’t know the probability of outcome. However, events with assessable probabilities we can forecast. If the outcome of an event has a certain probability, e.g. 30% it means that, statistically speaking, 30 out of a 100 events have such an outcome. (On a side note, “luck” and “bad luck” are terms only related to outcomes with low probabilities and either positive or negative events. We … Read more

Effective Branding

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Feb 282010
 

Branding is important for any company that deals with direct customers. A brand means trust. It reduces the uncertainties about your offering and helps customers to decide. A strong brand shortens sales cycles and reduces sales costs. Customers evaluate faster and less intense and they require less information about the offering during their decision process. Building a strong brand requires two key elements, a credible brand promise and consistently delivering on that promise. These two things seem easy to implement but are rarely done right. 1. Develop a credible brand promise. A brand promise summarizes what your brand should stand for. The brand promise must be credible (for the branding experts among you: that also … Read more

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