Pricing_Strategic_ImportanceStrategic_Price_ManagementValue_Oriented_PricingB2B_Price_Optimization

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Price Optimization Guide Contents
 
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Market/Value Based Pricing Services

Our value-based pricing engagements are designed improve your organization's competitive position. This is achieved by augmenting your ability to maximize, and - through better pricing - more fully extract the market value that your business delivers to customers.
 
 SIGNS VALUE-
 BASED PRICING
 PROCESSES MAY
 BE UNDER
 DEVELOPED
  • Sales force being criticized for not being able to “sell on value”
  • Sales force complaining the product/service offerings are not sufficiently competitive in certain market segments
  • Accuracy of system prices being challenged as:
    • too high in some situations, due to “product commoditization”, leading to loss of sales
    • too low in other situations, as some segments of the market are believed to have higher willingness to pay than prices being charged
Value Based Pricing Arrow
TYPICAL
UNDERLYING
ISSUES
  • Market value-based factors outweighed by cost- and/or pure competitive price factors in price setting algorithms
  • Sales force not sufficiently equipped with tangible tools they can leverage in real-life customer-facing situations to justify price premiums using the value proposition
 
Common value-based pricing project objectives include driving improvement in the following areas:
 

ENHANCE INTERNAL UNDERSTANDING OF THE VALUE PROPOSITION

IMPROVE ALIGNMENT OF INTERNAL PROCESSES WITH VALUE PROP
MORE INTENSE LEVERAGING OF 
VALUE PROP IN THE SALES PROCESS
Understand/measure perceived differentiated value of current/ contemplated offerings over competitive options, using tools such as:
  • economic value estimation models

  • interviews with sales force/customers

  • market surveys, etc.

Make direct linkages between (a) features of the offering, (b) qualitative description of related customer benefits, and (c) quantified hard dollar customer gains, such as customer $ cost savings and/or customer $ revenue lifts.

Improve market/value-alignment of price structure:
  • Realign/introduce new price metrics with customer value drivers (e.g., price by usage hour)

  • Align segmentation and price waterfall/discounting structures with customer value drivers (and optimize new waterfall elements).
Enhance alignment of product/offer configurations with variations in willingness to pay across customer segments through versioning/bundling of features, products and services.
Implement practical tools that help sales organizations:
  • confidently and convincingly communicate to customers the dollar value associated with customer benefit drivers

  • address price objections using value trade-offs in real world selling situations
Improve incentives and controls to ensure these tools are widely utilized:
  • update sales force incentive schemes to foster adoption of value based pricing/selling tools

  • implement “price fences” and price approval structures to ensure the price structure is not circumvented.
 

NEXT STEPS

Case Study: Click HERE for a case study describing the application of our market/value based pricing services at a mid-market wholesale distribution business!

Webinar: Click HERE to view our informative webinar titled "Getting B2B Distributor Sales Teams to Practice Value Based Pricing & Selling", where we review a proven, practical roadmap to implementing a value-based pricing/selling capability in B2B distribution! 

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The Innovative Pricing Group, LLC.
Tel.: 513.377.4692
Email: contact@pricinginnovation.com
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