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Useful Advices - Selling A Higher Price In A B-B Environment
Even the most sales savvy among us have had to fight back the nerves that materialize whenever we are faced with telling a customer about a price increase. Talking about it never makes for an easy conversation. When discussing a price increase in a business-to-business environment, it is important to remember that our customers have probably had to have the same discussion with thei
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
r own customers. A company exists only as long as it earns a profit and it can only do that if it delivers a quality product or service at the right price. This means that the key to any conversation about raising the price is to emphasize that such an increase will ensure product quality.
As you begin to prepare your strategy for communicating a price increase, ask your
As you begin to prepare your strategy for communicating a price increase, ask your
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
elf the following questions:
1. Does the customer take your product/service and add a standard percentage increase in price when selling to their customers? If this is the case, you can point out that your customer will make more money by taking a standard percentage of a higher amount.
2. What percentage of the customer’s business is your product/service? If
1. Does the customer take your product/service and add a standard percentage increase in price when selling to their customers? If this is the case, you can point out that your customer will make more money by taking a standard percentage of a higher amount.
2. What percentage of the customer’s business is your product/service? If
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
he percentage is small, tell them that the amount of increase is only a small percentage of their total business. If the percentage is great, then you can emphasize that the price increase is necessary to maintain the level of product quality necessary for them to serve their customers.
3. Has the customer faced any other price increases from other vendors? If so, try to
3. Has the customer faced any other price increases from other vendors? If so, try to
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
dentify what some percentages of the other increases have been. If yours falls into the low end, then you can point out how your increase is comparatively smaller than that of many others. If your increase is at the high end, you can either explain how yours is the only one you expect to take or that you wouldn’t be surprised to see others coming back to take another round of price
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
ncreases.
4. How does the customer view you and the products/services you sell? If you have a quality reputation and record, then you can emphasize that the increase has been carefully thought through and it is only being taken to ensure continued quality. If you have a spotty record with the customer, then you should stress how the price increase will allow you to begin
4. How does the customer view you and the products/services you sell? If you have a quality reputation and record, then you can emphasize that the increase has been carefully thought through and it is only being taken to ensure continued quality. If you have a spotty record with the customer, then you should stress how the price increase will allow you to begin
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
addressing some of the issues in question by allowing you to improve the overall quality of service they have been receiving. Naturally, it is important to make sure all comments are backed with a commitment to follow-through.
5. Will the customer raise an issue with the price increase? Be prepared to show documentation of how your costs have escalated and how other compa
5. Will the customer raise an issue with the price increase? Be prepared to show documentation of how your costs have escalated and how other compa
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
ies are experiencing the same increases. (An example is the increasing cost of oil, which has forced any company that uses petroleum in the manufacturing or transportation of goods to most likely increase prices.) When having this discussion, be sure to show empathy for the customer, but remain firm in what you’re saying. If the customer senses any hesitation on your part, they will
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
likely try to exploit it in the form of a price concession from you. Also, be prepared to share steps that your company has taken in an attempt to avoid a price increase. This can include ways you’ve already cut costs or how the price increase is the only way to maintain the quality and service the customer expects. A final point to emphasize is the time lag between this price incre
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
se and the previous increase. Having information available concerning the rate of inflation during that specific time period may also help diffuse the issue.
6. Why does the customer buy from you anyway? Knowing this will allow you to reinforce these points when talking about the price increase. You should also have ready at least two key needs of the customer that your p
6. Why does the customer buy from you anyway? Knowing this will allow you to reinforce these points when talking about the price increase. You should also have ready at least two key needs of the customer that your p
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
oduct or service satisfies. Be sure all of your strategic information about the customer is up-to-date before a price increase is announced.
7. How much business is at risk from the customer? We can sometimes get carried away thinking that if we raise prices, we’ll lose the customer, even though this is rarely the case. Think through what steps the customer would have to
7. How much business is at risk from the customer? We can sometimes get carried away thinking that if we raise prices, we’ll lose the customer, even though this is rarely the case. Think through what steps the customer would have to
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
take to move to another vendor. Many times the work involved in moving is not worth the effort, and thus the business is less at risk than thought.
The following Sales Presentation tips are the best practices to employ when executing a price increase:
1. Give the customer lead-time. Provide the customer with enough notice to allow them to make adjustments in th
The following Sales Presentation tips are the best practices to employ when executing a price increase:
1. Give the customer lead-time. Provide the customer with enough notice to allow them to make adjustments in th
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
ir information systems and to exercise at least one more order at the existing price.
2. Avoid showing favorites. Pricing integrity is always essential, but especially so during a price change. Do not treat particular customers more favorably than others in pricing during an increase. Different pricing levels are fine as long as they can be logically defended so that a cu
2. Avoid showing favorites. Pricing integrity is always essential, but especially so during a price change. Do not treat particular customers more favorably than others in pricing during an increase. Different pricing levels are fine as long as they can be logically defended so that a cu
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
tomer who is not receiving the price break can understand and accept the price change.
3. Do not allow your customer to find out about a price increase from your invoice. Any changes in pricing must come from the account executive or a person of high position within the company. Information regarding a price change should only appear on an invoice after every person invol
3. Do not allow your customer to find out about a price increase from your invoice. Any changes in pricing must come from the account executive or a person of high position within the company. Information regarding a price change should only appear on an invoice after every person invol
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
ed has been personally notified. (Sufficient time should occur in the price increase timeline to allow at least one invoice to contain a note of the pending increase in price.)
4. Make sure each customer service representative and anyone else who comes in contact with the customer is fully aware of when the price increase is going to be communicated. One of the most signi
4. Make sure each customer service representative and anyone else who comes in contact with the customer is fully aware of when the price increase is going to be communicated. One of the most signi
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
icant possibilities for confusion is when the customer hears conflicting information from different departments. Everyone in customer service needs to be fully aware of the price increase, the reasoning behind it, and the logistics for implementation. They should also be provided with a FAQ guide to ensure that when customers do ask them about elements of the pricing increase, they
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
are able to share accurate information.
5. Believe in the price increase. In order to be paid what you are worth, you must charge what you are worth. Although this is not something that can be explicitly communicated to the customer, this general sense is what sets apart the best practice companies and high-performing sales professionals.
6. Instill an open-pho
5. Believe in the price increase. In order to be paid what you are worth, you must charge what you are worth. Although this is not something that can be explicitly communicated to the customer, this general sense is what sets apart the best practice companies and high-performing sales professionals.
6. Instill an open-pho
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
e/open-door policy. Any time a price increase takes place, it is important for all senior executives to be willing to answer a phone call from a customer or to make phone calls to key customers. For successful consultative selling, nothing sends a stronger signal to a sales organization than seeing their senior executives on the front-line when dealing with a price increase.
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
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7. Before and after the price increase, monitor the sales patterns of your individual customers. It is important to quickly catch any changes that occur as a result of the price increase.
During the 1970’s and 1980’s, price increases were common and expected. In the past 10 years, however, we’ve all grown used to lower inflation and the overwhelming impact of Wal-Mart’
During the 1970’s and 1980’s, price increases were common and expected. In the past 10 years, however, we’ve all grown used to lower inflation and the overwhelming impact of Wal-Mart’
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
philosophy on pricing. Today, price increases are again growing more common and acceptable as long as they are well thought through and not seen as a way to merely increase profits. Because they are an inevitable part of business today, we can’t let ourselves avoid dealing with price increases. Instead, we should seek to use them strategically to increase our selling potential.
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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