Our Pricing Strategy Methodology Considers:
What value proposition is communicated to customers and prospects?
How specialized is each product or service?
What alternatives are there within your own product lineup?
- The price differences between the good, better and best within the product lineup should reflect the differences in value of those products to customers.
- These price differences can also provide incentives to move customers toward your preferred product mix.
Where is each product in its life-cycle?
- Trying to get too much out of entry-level products or pricing too low on high-end products can both result in lower profits.
- Customer behavior and price sensitivity change as products move through their life-cycles. Pricing strategies should reflect those life-cycle changes.
Customers are not all the same and, where possible, pricing strategies should reflect that.
Can pricing be differentiated between customers, and if so, how should it be done?
- In environments with complete price transparency, differentiating prices is more difficult and subtle. Creativity is required.
- In B2B environments, pricing is often individually negotiated and price differentiation happens naturally. However, it is critical that the price differentiation is a conscious choice based on the company’s competitive strategy and differences in value.
What will be included in the price?
- Services, freight, installation, payment terms, etc. all deliver some level of value to customers.
- Market dynamics, customer behavior, and the ability to control these elements all factor into whether the services should be bundled into a single stated price or broken out separately.
If charged separately, will accessorial items such as freight and installation have the same price to all customers?