How Can You Increase Your Average Deal Size?
What is a deal size?
Your deal size is the average price that your won accounts are closing for. Deal size is important to track because it tells you what accounts you are most likely to close on and when you are able to start going after bigger accounts. Monitoring average deal size in comparison to your historical average allows for you to stay on top of a changing pipeline and know when you should start going after larger accounts.
Start With Your ICP
When you start the sales process by looking at your ICP, Ideal Customer Profile, you are able to target the customers that are best for your company and most likely to close.
How does this impact deal size?
By utilizing an ICP, you can tailor your product to work with and fit the needs of your Ideal Customer Profile. Doing this is going to allow for a better fit for your target accounts, making it easier to close on higher priced plans and agree to additional add-ons.
Once you get started, what strategies can you use?
Compare Different Plans
Typically accounts are looking for a cheaper way to purchase a product, so they will opt to purchase a lower priced plan. Doing this lets them lower their risk of investing into a product that they may or may not like. When this situation comes up, your team’s SDRs should use this as a chance to discuss opportunity cost with them as well as how your product’s features will directly fulfill their needs. Your SDRs can describe the benefits of the larger, more inclusive plans as well as what the lower priced plans lack. Lower priced plans let your sales team close more deals quickly, but having a push towards larger plans allows your team to grow your average deal size.
Utilize Fixed Pricing
Just like your company, prices are ever changing. Often times, as a company grows so do their prices. It’s a good idea to remind your customers of this and offer fixed pricing for long-term plan purchases. This tactic has your account feeling the pressure to commit now before prices go up. For your account, fixed pricing for a long term commitment will save them time and ensures you that your company is keeping them as a customer.
Don’t Cut Prices to Close a Deal
Who doesn’t want something at a lower price? Instead of cutting the price of your product in an attempt to get an account to close, hold out a little longer and try using incentives instead. These incentives can be add-ons or upgrades. What resources does your company have that you can include in their closed deal? Any way you can add value to what they are buying without cutting prices will aid in increasing your average deal size.
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