On Your Next Big Deal? Double Your Pricing.
There’s a fun — and very lucrative and rewarding — exercise I like to go through with most of the startups I work with.
It’s goes like this:
- First, who’s your largest customer? OK.
- Now, do you have a prospect in the pipeline that’s somewhat similar?
- You do? Great. Now …
- On that deal … go quote twice your highest price ever. Go try to do that.
This is a terrific exercise to drive your deal size up.
It does >not< mean rip off your customer.
What it does force you to think about is providing a true solution to a big problem (more on that here:).
$1,000 a month is a lot of money for a widget, even if everyone on my team uses it. But $12,000 a year is dirt cheap for anything that solves a true problem. That solves me having to hire an engineer, or 3, to do something. That fixes something broken in my 500+ person org.
Your biggest deal so far is $100k, with Google?
Well … when Facebook comes in as a prospect … ask for $200k. With confidence. I know you just got comfortable asking for $100k. But if you’re worth $100k … then either your product today, or some future variant of that product, is worth $200k. Almost always.
You may have to build them an extra feature. Provide better on-boarding. Improve customer success. Upgrade your sales team, or at least, add reps with more experience selling larger deals. Build a new integration. Who knows.
You may have to change a bunch of things to get twice what you did on your largest previous deal. Or possibly — nothing.
Either way, you’ll learn. It’s a journey.
And if you have a true solution, that really makes an impact … you’ll probably get the 2x pricing. At least some of the time.
Once you do it once, level up. Make 2x the new 1x. $200k your new enterprise price point, not $100k. Do that for a little while. And then. It’s time to start again. 2x again.
Rinse. Wash. Repeat.