Pricing Strategy

Pricing effectively can generate a significant uplift to revenues and margins. Product companies have unique issues around cost-to-serve/pocket margin while software companies must consider licensing structures, implementation assistance and maintenance. 

We understand these issues, their impact on pricing and the options for analyzing each company’s unique situation. We can help improve pricing performance through a broad range of advisory and implementation services. Pricing is a very complex topic but can typically be segregated at three levels:

Pricing Strategy

  • 1. Clear understanding of buyer values by customer segment (particularly the value/price trade-off)
  • 2. Awareness of positioning relative to buyers’ alternatives
  • 3. Analysis and awareness of profitability and margin drivers. Well-defined pricing strategy by product line, customer segment, and channel—how to monetize the knowledge and assets of the company

Price Setting and Processes

  • 1. Single point of accountability for pricing within a business unit (e.g., a pricing czar)—collecting competitive pricing information, setting standard pricing, monitoring price realization, etc.
  • 2. Clear definition of processes for pricing approvals and handling exceptions—including well-defined roles and responsibilities
  • 3. Management visibility into price realization

Execution and Monitoring

  • 1. Effective training on key selling skills related to pricing—value based selling, dealing with customer push back, negotiating elements of price/volume/payment terms/delivery speed/etc.
  • 2. Powerful data and tools delivered to the line sales organization
  • 3. Well-designed incentives (cash and non-cash) that motivate the desired behaviors by the sales force
    Ongoing capability for monitoring market prices

If you believe your company can benefit from our help in facing pricing pressures in your market, please contact us.

Pricing Strategy (PDF) – Unlocking Profits In A Slow Growth World

Our case studies

See all projects