August 13, 2015
This blog is part of our “How to Be a Better Pricing Strategist” series, in which we asked top thought leaders and industry experts in the pricing field: “What is the best advice you could give a fellow pricing strategist?” Read all the responses here.
No doubt you will find pricing opportunities and leaking value in most businesses. However, do not stop at the easy and obvious improvements. What separates the best pricing strategist from the average is their ability to develop more strategic ideas for improving profit. They continually look for new approaches to achieve even higher value.
They may start with easy transactional improvements – such as, which of my customers are paying under target price? Or, where am I leaking value in my profit waterfall? Then, they question performance across the other two elements of pricing: value pricing and strategic/industry-level pricing. They question pricing strategy and targets as well as policies and pricing execution capability.
Is their price increase stick rate high? Does sales often revert to dropping price in difficult situations? Are competitors aggressively attacking their customers? Have they over-priced any markets and stifled growth? Could they improve profits if they influenced the business’s segmentation, offering (products & services), assets or supply chain strategy?
They question short term through mid-to-long term opportunities. They gather current and predictive information on competitors’ pricing strategy, asset capacities and costs along with macroeconomic data, industry trends and customer needs. They ask, “how might we influence or take advantage of the future?”
These are the tough questions the best strategists explore and find creative solutions for. This requires strategic out-of-the-box thinking as well as good business/marketing acumen. Advanced training, continual learning and self-motivation to question the status quo are critical.
To read more expert tips and advice, take a look at our Pricing Best Practices SlideBook here.