As strategies have shifted from cost cutting to demand creation – the function of pricing and profit analysis has been overlooked and under managed. Typical pricing strategies have aimed at increasing any level of volume typically through incentivized pricing, heavy discounts and bundling. However, this focus on price based selling has caused many companies to overlook critical elements and opportunities of a sustainable pricing and profit strategy. The rigor and discipline to hold to a reasonable “final transacted price” is important in the short term for profitability but also for the long term to help manage customer and industry price expectations.
Knowing that the market climate for your industry has changed and the industry players are different including a shift in decision makers’ priorities and needs, you may be asking yourself:
- How do I manage my pricing program?
- What should I be charging relative to my competitors? How big is the gap and how can I close the gap and improve?
- What is our value proposition relative to our price? Is our pricing fair within the market?
- How do I track my pricing?
- What is my true, “final transacted price” net of all known and unknown discounts or givebacks?
- How can I balance my product pricing portfolio to improve profit performance with the least amount of disruption?
- If we make changes to our pricing strategy –how will it impact our financials?
You Have to Look Outside Your Organization for the Answer!
Standard internal pricing and costing reports are typically not robust enough or lack critical customer, competitor detail to answer many questions and develop a new pricing strategy. Often times it is the customer that determines true market pricing and indicates (typically through third parties) opportunities for improved pricing performance by suppliers.
Clients are partnering with Ducker Worldwide to conduct pricing analysis and develop a category management program to:
- Develop a strong fact base driven by research from customers, distributors and competitors
- Conduct advanced analytics to consider the multiple factors impacting pricing and corresponding trade-offs
- Provide a basis and structure for point-in-time price monitoring
- Determine true value assessment, position and drivers for products and services
- Define methods to attack competitor channel pricing strategies
- Integrate new pricing programs and strategies with overall budgets, team roles and responsibilities and corporate plans
Pricing is not just a function; it’s an integral part of the organizational strategy.
A robust pricing discipline is not just a financial or data centric approach – it is one of the most consistent signals of your company’s value proposition and strategic positioning in the marketplace. In fact, during slow demand companies often reduce marketing and sales expenditures thus leaving the price as a key communicator of the product/service value. However, best in class companies apply the same rigor in integrating pricing strategies into other parts of the organization, including sales, marketing, operations and customer service. The integration of sound pricing practices within your long term strategy is necessary and can become a competitive advantage.
Bottom line: What can Ducker Worldwide’s Strategic Pricing Program do for you?
- Increase your profit margin and maximize sales potential
- Explore the relationship and impact of price changes and business profit
- Calculate and institute the optimum price for your products
- Create and sustain a competitive advantage
- Align your pricing strategy to corporate goals and objectives
- Grow your value proposition and customer loyalty
To learn more about Ducker Worldwide’s pricing strategy capabilities, industry expertise and how we can help your company grow, please contact one of our team members at 1.877.538.2537 or firstname.lastname@example.org.