I had a good discussion with a client about my last post, specifically about allowing your Advisors the discretion to discount.
He asked if he could apply the same methodology in reverse (his only sales person had the ability to “pad” the price in his last position).
My answer: Yes, you can. But it’s not what I recommend.
Given the Advisor a similar discretion to add 10% to the book price has an obvious benefit. Even with the additional amount is split with the Advisor, the remaining half drops right to the bottom line as profit. (Assuming, of course, you’ve got your book pricing dialed in appropriately, and you’ve already allowed for sufficient margin and profit.)
Another advantage you might find, it that when you give an Advisor the ability to charge a higher price, and make a higher commission, they sometimes do! They then have a harder time with the perennial gripe that the prices are too high.
There is a certain symmetry to it.
But I don’t like it.
I prefer building the ethos of the company of delivering value to the customer. Part of that is delivering real benefits–certainly everything you promise. And part of that is charging a fair price. Fair to the customer AND fair to the company. (Your job is setting that fair book price.)
If you’ve already built pricing the includes your fair profit, does allowing an Advisor to charge even more align with a philosophy of serving the customer? I don’t think so.
I’m calling it like I see it. But what do you think?