Pricing Strategy

Question 1

“Quick question, is your organization more inclined to go with a multi-year option if it has a heavy discount on it? (do not say a word, sit and wait for response)

Possible response #1:
Yes or it depends on how much of a discount.

Answer 1

• “Perfect!! So let’s price you for diamond (or whichever level you agreed upon) because if we can get ALL the features to fit within your budget than why not?” (it’s all about the influx and tone of how you say this) “Worse case we can always take away features and price for something else or a different level…”
• Let them know 3 year is ONLY good for new customers.

Question 2

“Quick question, is your organization more inclined to go with a multi-year option if it has a heavy discount on it? (do not say a word, sit and wait for response)

Possible response #2:
No we do not do multi years.

Answer 2

• “I completely understand…most organizations are focused on saving the most money over the course of their subscription so I am going to send you the 1 and 3 year options so you can at least review the savings and make the best decision for your organization.

Question 3

“Quick question, is your organization more inclined to go with a multi-year option if it has a heavy discount on it? (do not say a word, sit and wait for response)

Possible response #3:
We do but we want to start with a 1 year and see how it goes.

Answer 3

• That makes sense. I do need to let you know that we only offer those discounts when you are a new customer starting up. Offering this after you sign a 1 year term causes churn due to the lower cost and creates a revenue recognition problem. I want you to be comfortable with your decision but since you said budget was so important I really suggest you look at how much your organization will save going with the 3 year term. Is this something you will consider?