Today’s customers have an unprecedented amount of published information at their fingertips. As content transitions from physical to digital publishing new competitors emerge every day. To compete in such a dynamic industry you need to build stronger relationships with clients, while also increasing customers’ average spend.

As one of the world’s leading pricing consultancies, Pricing Solutions has become a key partner to many publishing and information clients as they strategically increase their revenues through more advanced pricing practices. We’ve managed a number of projects that deal with key industry challenges. It is a crucial time to ensure your pricing captures the value being delivered contact us today to discuss solutions.

Unstructured Discounting Practices

In many industries, variable costs form a floor for any sales discounting. However in the publishing industry costs are generally upfront, in content production and building the platforms, and the variable costs for adding new users are typically low. This can create a sales culture that any sale produces profit, regardless of the price level. Using this approach can have lasting damage on your brand, as it creates unfair price differences between customers that put company revenue and reputation at risk if your customers were to ever find out.

Having a strong and structured approach to discounting based on justified discount levels and effective sales force incentives can get your discounting under control and produce 1st-year revenue improvement of about 2-5% with limited risk of losing customers.

Digital Content Publishing vs Traditional Print Content Publishing

Many of our customers have struggled with digital products to achieve the same long established prices that they had for hard copy published products, despite this being the delivery method that customers prefer. This is largely due to price anchoring from the vast amount of information that is available to everyone on the internet for free. Obviously strong communication of your product differentiation will help, but this is likely to be a perception that is difficult to change in the short term. The key to optimising revenues is to combine hard-copy and digital in effective bundles, and to capture incremental revenues when the digital delivery of the product allows customers to use the products in new and improved ways.

Setting Optimal Prices for All Customers

Having one list price for all customers is a heavily dated approach to pricing, as it has been long established that segmented pricing optimised for more specific customer groups increases volumes and revenues. But setting these levels using industry knowledge and past pricing information is a difficult challenge. Many of our information and publishing clients have turned to primary research with customers to establish their optimal pricing levels. Pricing Solutions have developed advanced techniques using conjoint and discrete choice questioning to gain more robust insights on which to base segmented pricing decisions.

User Based Subscription Pricing is Limiting Customer Usage

Subscription pricing has fast become the standard pricing structure for digital products in the industry. Overall this is a good thing as it ties customers into longer relationships and provides stable recurring revenues. Most of these subscription models are based on the number of customer users, to determine the price. While this does do an effective job of price differentiation between large and small teams, it does have the negative impact of incentivising customer to have fewer people access your products. Some companies are now looking at negotiating prices with unlimited users. This encourages customers to get the maximum value out of their products and further integrates the products in their customers’ business. The challenge here is then to set the optimal prices for these more loosely defined deals, developing price calculators for the sales force is a great way to simplify these complex pricing decisions.

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