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My Top 4 Mistakes in Aftermarket Pricing. Save Yourself Some Pain & Don’t Make Them Yourself.

November 26, 2018 in Blog

Today I would like to share some of the mistakes I have made during my years in aftermarket pricing. I hope that by reading this material, you will be able to avoid as many of them as possible. I guess I’m trying to write the text which would have helped me when I did my first aftermarket pricing project about ten years ago.

To keep it simple, I decided to make a list of criteria which I think are important if a pricing strategy is to last for a long time. I will zoom into attribute-based pricing strategies. The reason is that those usually give the best return but are also the most difficult to manage.

Before we get into this, just a short reminder that when I write “attribute-based pricing strategies”, I refer to price logic, where physical attributes, such as weight, length, power, brand, etc. are used to set the price. In a nutshell, you create groups of similar parts, and in each group you define which attributes should be used. Then you create the price equation based on those attributes. So here it is, the list of what you should try to avoid if you want your pricing strategy to pass the test of time. My hope is that you will be able to avoid most of these mistakes. Enjoy 😊

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Four pricing strategies for the aftermarket

October 18, 2018 in Blog

In my career, I have been implementing pricing strategies for numerous manufacturing companies. Even though they all are unique, they usually have the following similarities in their portfolios:


They have thousands of parts

There is a mix of manufactured and purchased parts

Some of the manufactured parts are easy to copy, others are not

The cost of the manufactured parts is driven by factors not relevant to the customer; is the product in mass production? Have we switched suppliers? Are there setup costs needed to start production again? Etc.

Few parts represent the majority of sales

It’s dangerous to overprice low selling products, as one high price is enough to damage customer relations


So, how best to price such a portfolio? There are thousands of products, you cannot look at each of them individually. The cost is a terrible base for manufactured parts, pricing one too high is enough to upset and lose a customer forever.

What we have ended up implementing is a combination of strategies, all suitable for different parts of the portfolio. Let me share on a high level what these strategies are. Continue reading »

7 must read books for any pricing professional

October 17, 2018 in Blog

Do you want to learn more about pricing theory? Do you want to be inspired by examples of real-life pricing examples? Do you want to be able to create more effective pricing strategies? Or are you interested in absorbing every bit of information from authorities on pricing

Below you find 7 pricing books handpicked by our pricing specialists which will get you a long way and that we have found extremely useful. This is far from a definitive list, of course, but it’s a great start. Continue reading »

How to use willingness-to-pay in pricing?

September 20, 2018 in Blog

Willingness to pay is the maximum amount a customer is willing to spend on a product or service. Being aware of your customers willingness-to-pay can be the key to a successful price strategy. We will focus here on using willingness to pay in a B2B context.

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Why you need a price management software

August 31, 2018 in Blog

The good news is if you want to get anywhere at within pricing in the early days, you’ll have a handful of Excel files in place.  Which is great. In fact, it’s amazing.

Getting control of your pricing and putting a price framework in place is though. Who wants to run prices by another person and have the time to collect, clean and package the data needed for better pricing? And you did it.

And yet …

It probably won’t be enough. 5 Excel files, 50 sheets, whatever the number is. It’s not scalable. In fact, it may seem like you will everything would fall apart if you left the company.

I get it, I’ve been there. In fact, most price managers have. At one point its simply time to leverage up to a price management software and leave the Excel files behind. You will know when.

Sounds familiar? You’re not alone.

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Why aftermarket business is different

July 12, 2018 in Blog

I have seen it so many times. How companies cure the aftermarket business with the same medicine used for their other businesses.

And guess what… they usually end up giving away margin, losing sales volume, and sometimes even destroying their brand reputation.

Have you seen it too?

So how can you optimize your aftermarket without ending up in any of these pit-falls? Well, the first thing you need to do is understand how your aftermarket is different from other parts of the business.

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Why aftermarket pricing is best done centrally

June 25, 2018 in Blog

Have you also been to that meeting?

The meeting where the local team talks about why they need to own the aftermarket pricing? That they know the market better. How they adapt to the very special situation of their market. How your central pricing is all theory and not reality.

Well… I have been there. Many times. And according to me, the local teams are wrong believing that they are best served setting spare part prices themselves.

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How to build a pricing strategy in 4 easy steps

June 7, 2018 in Blog

For this blog post, we are looking at how to build a pricing strategy in 4 easy steps. We will look at what’s happening today and understand some of the reasons behind failed pricing activities, as well as explain why it’s essential for your business to have a pricing strategy.

What are the benefits of having a pricing strategy?

1. A strategy will give you a set of objectives that are aimed to achieve.

2. It will enable you to understand why you are trying to achieve these objectives.

3. The objectives will have some KPIs (Key Performance Indicators) allowing you to measure and assess what you are doing.

4. It will provide clarity to your pricing and at what frequency you need to reprice.

What happens when you don’t have a strategy?

Often businesses miss out on these benefits because they jump reactively from a pricing need to pricing. The results are as follows. Continue reading »

Why You Need to Start with Your Pricing Objectives

May 15, 2018 in Blog

Learn here why pricing objectives are important, and what type of objectives are most relevant in today’s market.

Creating a pricing strategy is never an easy task. For both B2B and B2C markets, first be clear on what is your pricing “destination”. That should translate into clear, measurable business objectives. Think in terms of: “increase market share by 10%” or “increase customer satisfaction by 20%. Sync the pricing destination with the overall business objectives of the company as pricing objectives need to work towards the business’s plans for the future. Of course, depending on the specific needs of your company, you can have multiple objectives or even change them along the way.

When choosing your pricing objectives, keep in mind that pricing is intertwined with the financial, sales, and marketing departments. Hence, your pricing objectives should relate to all 3 of these key aspects:
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2018 PriceEdge Retreat

May 14, 2018 in Blog

Spoiler alert: We had an all-around fantastic retreat 😊

Two weeks ago, the Stockholm and Bucharest office spent a couple of great days together in Sintra outside Lisbon, to work together, reconnect, and get some key development tickets kickstarted. It appears from the photos that we mostly ate, drank and laughed, but truth be told, when we get together, mostly we get a lot of stuff done including a bunch of ping pong games 😉.

Since we are a distributed team working form different locations (4 from Sweden, 6 from Bucharest and 1 from Vienna), we usually all only get to work togheter as two-dimensional people over Skype and Slack calls.

Our main goal for when we get together each year is to create shared memories. This means spending quality face time with each other, cooking, eating, doing yoga (Radu & Radu) and getting key discussions and decisions made. Basically, the idea is to recharge our emotional batteries for the months ahead and ahve a clear plan on how to proceed with our projects, when we each go back to our seperate offices.

We also use the retreats to talk strategy as a team and have company-wide conversations if needed, but that’s only a small part of the retreat, as it eats into the having fun time!

This years retreat was our second retreat together. The last one was in New York during the spring of 2016, which included some crazy nights including a visit to one of Håkan Hellströms local gigs.

The Location

We always try to avoid hotel accommodations; nothing against them, but we prefer to spend our retreats in a more comfy and relaxed space where we feel at home.

This year the choice was easy as we could combine a visit to the NYPS pricing conference with our own retreat. Hence the selected to rent a large villa in lovely Sintra just outside Lisbon.

PriceEdge Retreat

First team checking in…

PriceEdge Retreat

…and checking out the view

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