You are a business owner. You always want to make the best decisions for your business to grow and expand and create a bigger profit margin. You’ve heard about strategic pricing but you are not sure what to do next? At Strategic Pricing Solutions, our mission and goals are to help businesses achieve their goal. We do this by joining forces and educating the business in the best ways to engage pricing strategies, analytics and processes. Let’s focus on the process to price strategically and how we go about that.
Strategic pricing processes
The first thing I would do is sit down with you and go over the way your business is set up. I would look at the various different departments in a much generalized way and break them down into segments. For instance:
- Customer segmentation.
- Price architecture.
- Account review.
- Pricing tools.
- Price testing.
- Measurement & reporting.
- Knowledge transfer.
Now that I have outlined the segments, let’s look at each one briefly.
What are all the roles inside your organization? Who has the authority in the company to set prices? Who physically enters the prices and who has the authority to override and change the prices?
Different customers can either afford different things or simply won’t pay more than a specific price for an item or service. We will collect the data to validate that this prices differences are behavioral and relevant. In this process we are able to validate, adjust and systematize the segmentation of groupings.
The next step is to structure the prices into your system.
When the prices are entered into your system, your account is reviewed to assure that your product to customer target prices are aligned correctly.
Your business is set up with pricing tool software what will enable your company to implement the analytics and strategies necessary to stay on top of your current data.
Throughout the entire process, price testing is taking place. If the original prices are not working, they are adjusted and changes are made.
Measurement and reporting
This is exactly as it sounds. The results are measured and reported via dashboards and Key Performance Indicators also know as KPI’s.
A big part of what we do during this process is knowledge transfer. With knowledge transfer we enable the business to do these tasks and processes for themselves into the future. I am sure you have heard the old Chinese proverb? Give a man a fish? Well you know the rest. This knowledge transfer is priceless. It will aide you in change management training, best practice sharing, value selling and the most important, pricing training.
As you can see, this whole pricing situation is a bit more complicated than any of us would like it to be. The good news is that with the right company, you can discover the right price point and watch your profit margin expand to a place you never thought it could go. It is worth it for every business, big or small, that offers services and or products to be aware that your prices and your pricing strategy can make or break your business. If it was me or my business, I know I would give it a 110% chance of succeeding and I am sure you will too.