Jared Smith is a Business Consultant at Vendavo, a world-class commercial excellence software firm that enjoys seeing clients evolve into leaders in their industry. ​He is a Ph.D. candidate at Oklahoma State University researching how companies execute strategies, pricing, and sales dynamics.

In this episode, Jared talks about salespeople's insufficiency where business acumen is concerned. He is encouraging companies to put some training where salespeople can do value statements, challenger selling, and using whatever pricing methodologies they can have.

 

Why you have to check out today's podcast:

• Find out how to motivate salespeople to understand the target price and capture a product's value
• Learn how salespeople can deviate from the target price and still earn from it
• Find out how salespeople can defend pricing from a product's economic value and not just on discounting

 

"Have the courage to experiment, have the courage to look at different things and approach pricing in a different way. The statement that we're going to raise prices and our customers are going to leave us, and we live in that fear all the time, that's not a really rational way of looking at things."

- Jared Smith

 

Topics Covered:

01:18 - Relating his first exposure to pricing

02:55 - Pricing for B2C versus B2B

04:43 - Taking a look at the whole value statements between B2C and B2B

06:45 - The disconnect between sales and pricing

08:26 - Shortfall in business acumen of most salespeople

10:06 - How to make value conversation happen

12:56 - Talking about sales discount and escalation processes

15:03 - He believes giving salespeople autonomy

16:50 - Setting compensation structures in a way that motivates salespeople not to discount but sell on value

18:24 - The compensation style that motivates most salespeople

20:35 - The challenge of getting salespeople sell above the target price

21:34 - Higher commission rate when hitting the price ceiling

22:20 - Understanding the value that customers get from the product

23:17 - Jared’s best pricing advice that greatly impacts a business

 

Key Takeaways:

"The key thing that I see is, when you start to talk about price, it gets into that whole thing of the sales operations, ‘Do I go there and do I lead with that ceiling price and discount down to the target?’" - Jared Smith

“What about if we set our compensation structures in such a way that motivates them not to discount, to always sell that value, but also maybe even motivates them to go higher than that as well?” - Jared Smith

“In the psychology of salespeople, that's what really drives a lot of the behavior and how you put your compensation system to move with those three numbers right there - the list price, ceiling, and target price.” - Jared Smith

"Have the courage to develop the capability of pricing in your company. Invest in good people, invest in good technologies, things that can support this as a discipline, much like you've been doing in the supply chain and all these other ones for years. So have the courage to change, have the courage to have the critical conversations." - Jared Smith

 

Resources/People Mentioned:

• Prime Source Building Products: https://www.primesourcebp.com/
• Frito Lay: https://www.fritolay.com/

 

Connect with Jared Smith:

• Email: [email protected]
• LinkedIn: https://www.linkedin.com/in/jaredpaulsmith/

 

Connect with Mark Stiving: 

• Email: [email protected]
• LinkedIn: https://www.linkedin.com/in/stiving/