Pricing Tips

1. If you have done pricing research, be sure to share it with your sales force. It will help build their confidence in your pricing strategy.
2. If sales are slow, don’t assume that price is the problem. It may be something else, in which case a price cut is not the way to go.
3. Include the sales team in the pricing strategy development process. It will enhance buy-in and reduce roadblocks once the new offering is in the market.
4. Asking good questions about customer needs helps reduce the necessity to discount.
5. Make the connection between your offering and the customer’s desired end state.
6. Never talk about price up front. The focus should always be on value. Price is the last thing you need to mention when discussing a new offering.
7. Negotiate late. Giving discounts in the early stages of a deal are not as high valued as those given at the end.
8. Price objections are often a disguise for deeper concerns
9. Establish your value early or you will always be defending your price.
10. Include a section on Pricing Strategy as part of the annual business plan. The more specific the direction the better.
11. When determining costs to support a pricing analysis, consider how those costs change as the volume changes.
12. Each month review the number of price overrides that are performed at the time of order entry. Zero overrides is an attainable goal.
13. Determine the cost to serve different customer segments before you decide how to price to them.
14. Use role-playing and simulations to test your competitive pricing strategies
15. Measure the margin performance of your sales team and reward high performers.
16. Implementing a price increase can be done in several different ways. For example, consider reducing discounts to less profitable customer segments.
17. Be sure to communicate the value being delivered after the sale is made. This will reduce price resistance the next time they buy,
18. Price optimization models and technologies are starting to penetrate most industries. You should investigate this area if you have not already done so.
19. Review your price points to make sure you are not leaving money on the table.
    Research has shown that many products sell more units at a higher price if the right psychological price point is selected.
20. If you are in a bidding/contracting environment be sure you measure your won/lost ratio. It will help you see trends and be less reactive.
21. Make sure that you have some key performance indicators to measure your pricing effectiveness. They will give you a sense of control over your pricing and make sure everyone is working on the same page
22. Consider the costs of retention versus those of acquisition when you determine your discounting policy.
23. Tier your resolutions to customer complaints to ensure you give an appropriate response.
24. Keep your eyes open for “system beaters,” those who complain every time they buy something just to get a discount.

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