Most pricing strategies can be categorized as cost-plus or value-based. Both are good but incomplete. In my experience, those who set the prices don’t know, forget, or leave out costs that they shouldn’t. Sometimes it is the cost of the salary of the principals. Sometimes it’s all the costs involved in being able to provide this product or service.
Value-based pricing incorporates the costs and the value this product or service provides the customer. If all the true total costs are accounted for, then determining what the customer gets out of it should be relatively simple. Market research, competitive analysis, and usability testing gives you a place to start.
However, while value-based pricing can help you get the right customers, it doesn’t focus on helping you keep those customers, or on encouraging them to “recruit” others like them. A Legacy Pricing™ strategy can accomplish both. It not only focuses on the present of your company, but lays out a path to a bright future for your business.
Topics: Strategic Planning
SPIFF or SPIF or SPIV refers to a manufacturer or employer paying a small, immediate bonus for a sale or even a demo to a salesperson. These can be good for your customers if these “paid recommendations” are appropriate and truthful. A SPIFF can be cash or something the salespeople really value or think is "spiffy" like a trip, drone, virtual reality headset or other "have to have" gadget as the reward and motivator.
Topics: Business Best Practices
“An organization, no matter how well designed, is only as good as the people who live and work in it." -Dee Hock, author and businessman
Competitive advantage is about finding a “hole in the market,” something that other competitors would have trouble providing. If you have strong and observable business ethics and core values, you have a huge competitive advantage, because you are different from most others.
Topics: Content Type
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The most important difference between Networking, Prospecting and Mentoring are the rules each one uses to accomplish a specific business goal. Knowing those will improve success and save time, money, and discouragement.
You can increase your sales through the power of networking. But, that’s nothing compared to the balance and other benefits that come from the friends you make when you use it properly. It gives you power that you don’t have as an individual. It reduces the feeling of personal alienation or aloneness that can happen when you run a small business. It impacts all areas of the business not just sales. It can make your day-to-day business goals more attainable.
SPIFF or SPIF or SPIV refers to the practice of paying a small, immediate bonus for a sale to a salesperson. It's usually paid by a manufacturer or employer. It’s a way to encourage a salesperson to push one product more often than a non-SPIFF paid product.
It can be good for business but it can also be questionable or even illegal because it can appear that the salesperson is unbiased in their recommendation when they really are not. In 2007, the US Department of Justice labeled SPIFFs as kickbacks and illegal — at least for government purchases.
Manufacturers have a complicated sale whether they are selling direct or through a channel. It takes the best salespeople to be successful in this environment. It also requires the company to do their part.
How do you measure success each year? It takes more than just balancing and closing the books. At the Business Success Center, we encourage our clients to conduct reviews each quarter but especially fourth quarter. This planning tool makes them focus on the “40,000 Foot Owners’ View” that is critical for success. It also gives owners and top management a headstart with making the following year even better.