Monday Price Point:​
Last week I had a call with a new US client who is in the middle of renewing a $1.5M ACV contract with their largest customer.
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They want to take it to $2.5M per year and was going through the usual back-and-forth of what arguments to use, anticipating what procurement might say etc.
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The problem with this approach is that the anchor of the whole conversation is the current $1.5M price point. Any additional dollar will feel like a concession by the customer.
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So I said: "Tell them you want to take them to $20M a year.".
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My client: "... what? They'd never pay that."
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Me: "Not today, no - but that's not the point. They point is that they should want to end up paying you $20M a year"
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My client: "Why would they want that?"
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Me: "Because if they were to pay you $20M a year instead of the current $1.5M you obviously would have to deliver something like 20x the value of today.
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You'd have the current solution run not just the warehouses but also all of the shop floors and the full supply chain - stuff that is already in your long term roadmap."
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My client: "So I remind the customer that since we're aligned on the plan to 20x the value - they should also be fine with a future increase in price?".
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Me: "Exactly - you shift the reference point away from the $1.5M of today to the $20M of tomorrow. And that makes the $2.5M you ask for feel like just as part of an already-agreed upon process".
All customers want more value.
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And all customers are fine with paying more money if they also get more value.
So you use that logic to demonstrate that they themselves actually want to pay you 10x more.

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Here is how you do it:​
Use this as a reframe with customers and use language like this:
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• Look - my goal is to take you to $20M a year.
• That can only happen if the product so good that you feel $20M is a total bargain.
• I'm thinking that the product should be able to do XYZ to be worth that to you - but you let me know if that's also how you see it?
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This is an excellent reframing of the conversation with the customer - it feels like a value conversation (which it is), but without forcing the customer to admit to anything today.
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But it sets up the conversation for a new price during renewal, as it reinforces that price is connected to value.
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And that if value goes up - then it's only natural that price goes up too!
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As promised: a point about pricing every Monday.
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PS: I'll do weekly webinars every Thursday at 15:00 CET / 9am EST starting September, so block that time already now and watch out for our announcement on topics.

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