Building Pricing Sustainability for Competitive AdvantageWinning where it counts |
Publish date:
Over the last few years, there has been a lot of well-founded enthusiasm about the benefits of pricing, and companies are listening. As word has spread, more companies are using rigorous data analysis to set prices at product introduction. An increasing number of forward-thinking companies are conducting periodic product-by-product or portfolio-wide pricing reviews. However, less well known is that, as powerful as these strategies are, their benefits begin to erode at the very moment prices are set.
The power of pricing to drive revenue, profitability, and shareholder value is dependent on an increasingly complex and nuanced interplay of customer decision-making, market conditions, and competitor positioning. Because these variables are constantly shifting, and their relationships vary widely across markets, static or formulaic pricing decisions may quickly become out of step with the marketplace. The result: money is left on the table.
Regardless of the pricing maturity level selected, pricing execution projects can quickly deliver tangible results in both top line and bottom line improvements. Leadership and other stakeholder interest in the power of pricing also develops along the way. And because pricing execution projects involve stakeholders across the entire organization – Management, Marketing, Sales, Operations, Finance, Information Technology, and others – all the key players become aware and aligned to the pricing objectives at hand
Developing the capacity to continually adapt pricing strategies and execution to changing market conditions is challenging at best. The good news is that any company can begin to build the competency for sustainable pricing. Pricing sustainability is not an “all or nothing” proposition. Companies can incrementally develop the tools, processes, and knowledge management to improve pricing optimization, execution, and enforcement. For those companies that adopt this incremental and continuous pricing improvement approach, pricing sustainability can be a powerful source of competitive advantage
Building Pricing Sustainability for Competitive Advantage
(418.16 KB)
