Successful Increase
of Real-World Selling Prices
The Challenge
Historically, the company had relied on printed products delivering a high proportion of revenues but – like many other information companies – customers now wanted this information digitally. This digital shift lead to a perceived decrease in customers willingness to pay. It also created an opening for competitors to significantly grow their market share.
A pricing strategy was required to ensure the long-term profitability of the business.
Content and Publishing Industries
As an established market leader in printed and digital content, this client’s internal expectations had developed to ensure market share was maintained. However, with no formal pricing strategy in place there was a lack of clarity between whether they should be pricing to maximize market share or profit.
Upon partnering with the client, Pricing Solutions helped develop their pricing strategy and price setting processes centred on value based pricing principles. The project focused on capabilities transfer and ensuring product managers were equipped to evaluate pricing challenges internally in the future.
Building a Solution that Fits
In order to help combat this challenge, the company wanted to ensure that their product managers had the ability to fully evaluate the situation and set prices to achieve company objectives.
Pricing Solutions provided customised pricing training to a large group of business stakeholders, giving the company a clear idea of what stages needed to be built into their pricing process, while also providing a common language for objectively evaluating pricing challenges.
We then facilitated a series of workshops where we helped the senior management team produce a corporate pricing strategy to sit within the overall business strategy.
Pricing Solutions then produced an initial straw-man draft which was reviewed by all relevant business functions, such as Sales, Product Management, Marketing, Finance, to ensure buy-in.
This was then signed and approved by the CEO and included in the business strategy document.
Pricing Solutions then worked with the product management team to incorporate a number of the tools from the training into their standard price approval processes. This gave the client the direction and skills they needed to use value-based pricing principles on their products.
One key to the success of this process was forcing Product Managers to evaluate different pricing options, presenting the pros, cons, risks and rewards rather than just presenting a price and showing the justification, which is easy to manipulate.
The fact that Senior Management were trained in the same techniques was crucial to ensure they are able to critically evaluate the results and ensure these met the newly defined pricing strategy.
Below: The client-specific pricing process was designed around Pricing Solutions’ 4 Core Pricing Processes Framework.
The Result?
Pricing Solutions worked with four Product Managers during their next pricing review to ensure they were able to use the tools and processes practically, and not just in training.
The Product Managers have now embedded pricing consideration into their product development and price review process.
The results of these were then presented to the Senior Management in the pricing review and have since influenced the real world selling prices of numerous products.
The Pricing Solutions Difference
Pricing Solutions focuses on pricing and only pricing, and hence were able to provide specialist knowledge of requirements for an effective pricing strategy and process.
Our senior team of consultants were able to work in a collaborative workshop style with Senior Management, Finance and Product Managers to establish alignment on what business objectives the pricing strategy needed to achieve.
The client appreciated our implementation focus and continuing work with Product Managers as they look to use the new process for the first and second time.