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 »
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:
Continue reading »