Make Your Pricing More Effective ...
“Do List Prices Matter?” How many times have you heard that? It’s a rhetorical question which is making an oblique statement: “I don’t think list prices matter” and much more besides.
This article will explain why list prices do matter, and provide insight into some of the reasons why people ask this question in the first place.
This is the third article of Paul’s that the Professional Pricing Society has published.
Any questions, please contact paul.charlton@thepricingfactory.com
Pricing Audit, n.
Internal Audit’s favorite choice of audit which they do as often as they can because it’s the most interesting thing they can find to audit. It’s an area of the business where they know they least, can learn the most, and it’s actually interesting.
Having said that, I’ve been totally underwhelmed by Pricing Audits either completely missing what’s important – such as critical business processes which weren’t being performed, key metrics not identified let alone measured, and incomplete pricing strategies etc – or avoiding difficult issues, like breaking up audit finds and spreading them across the organization because they didn’t want to appear to be “victimizing” one particularly delinquent group.
If you’re relying on a Pricing Audit by your Internal Audit to identify your pricing issues, don’t. Get someone in who knows something about pricing. Call 281-782-9821.
Uncompetitive Product Costs, n.pl.
Have you ever thought that you might have competitive product costs after all, and that it’s your pricing that sucks? Just saying.
Maybe the way your bid team analyzes the deal is different to the competition? Maybe the scope of their analysis is different? Maybe their criteria for what is acceptable is different? Maybe they know how to structure deals better than you do?
Maybe you haven’t structured the deal correctly? Maybe you need to re-structure the deal.
How is sales comp impacting this? Sales management? Sales behavior?
Maybe you need to get a pricing expert in? Someone who can give you a better idea of whether you are cost uncompetitive or not.
Maybe.
Great products? Lackluster margins? Underwhelming revenue growth? Maybe your pricing is holding you back. Get a Pricing Diagnostic and break free.
Uncompetitive Product Costs, n.pl.
Have you ever thought that you might have competitive product costs after all, and that it’s your pricing that sucks? Just saying.
New Product Insanity, n.
Thinking that your next New Product will fix all your business problems when it has never done so in the past.
Meta Price Analysis, n.
Analysis which determines how much and what type of price analysis needs to be done.
It’s not how much analysis you do that matters; it’s how little, quick, repeatable and intelligible the analysis is, and most importantly much insight you create in the process:
Meta Price Analysis Value = f {Insight, Speed, Repeatability, Intelligibility / Effort}
Big Data, n. pl. but s. or pl. in constr., often attrib.
It doesn’t matter how big your data is, it’s how much insight you get from it that counts.
Spiceheads enjoying Scale Computing’s on-premise hospitality at Spiceworks 2016Â @ScaleComputing #Spiceworld2016
@PaulCharlton of @pricingfactory presenting at There was a great question from Howard Davies of @Contextworld at the GTDC meeting in EMEA in June: Do list prices matter? Here’s the final installment!
All the blogs so far have focused on answering the question. As is often the case with pricing, the answer to the question is actually of secondary importance. What is of greater importance is why the question was asked in the first place. You see, the question itself reveals that there is a pricing a problem, and immediately offers clues as to what the problem might be. When execs ask the question, they are very obliquely flagging one or more the following
So they don’t realize it, but to me when they ask this question, it immediately raises a pricing red flag in my mind. There is a pricing problem here which needs fixing urgently. But while list prices aren’t the problem, they are definitely part of the solution.
Thank you Howard! Great question!
High List (Price), High Discount, n. technical, obsolete. How to undermine your investment in your branding and devalue your own value prop with a few carelessly chosen words, like "80% discount". … [Read More...]
Price Floor (2), n. a tell. A red flag when requested by a rep. It's a flaming red flag when requested by a rep before they've even engaged with the customer. It's a flaming red flag on … [Read More...]
Price Floor, n. technical. 1) The deal price at which you no longer need a Sales Rep; 2) The deal price which, if you did all deals at, you would no longer need a Sales Department. … [Read More...]
Disruptive pricing, n. gerund, aspirational. When striving for consistent and predictable outcomes just won't do. Get your disruptive pricing in first, before the opposition does. … [Read More...]
