For business-to-business companies, the deal approval process and incentives have a strong effect on the behavior of frontline sales representatives. Bain & Company’s global survey of 1,700 B2B companies found that, among the leading companies in market-share growth and pricing outcomes, almost 70% excel on two dimensions. First, they have a robust process for escalating approval of nonstandard deals, with clear logic to handle the surge of deals at quarter-end. Second, they tie reps’ compensation to realized price. How this plays out varies by industry. Some leaders in enterprise technology, for instance, take the extra step of arming their reps with data-driven insights on the right price for a particular deal, before reps talk with the customer. These deal-specific insights derive from analysis of characteristics such as the customer’s size, industry and five-year purchase history, and the relevant competitors for the product. The result is a better net price on deals without sacrificing volume sold.
Justin Murphy is a partner with Bain & Company’s Customer Strategy & Marketing practice. He is based in San Francisco.
How the best B2B companies set and get the right price.