We are off and running in the New Year. January is almost over, and it is time to begin measuring how effective your pricing structure and prices have been. Don’t forget – monitor, evaluate and report on the effectiveness of pricing is one of your New Year’s Pricing Resolutions. To be useful to your organization, […]
This is the second in a six part blog series on how manufacturers and distributors can apply Six Sigma methodology to the pricing function to generate repeatable margin gains. This blog covers what to consider in defining pricing team members roles and responsibilities and setting properly aligned goals. All pricing practice leaders know a disciplined […]
Mega-Manufacturers continue their proven strategy to sustain profitability in a slow growth economy – tighten up their supply chain. While this is not the first time for many distributors, unfortunately a good many sales managers have forgotten the lessons. Excerpts of the article authored by Frank E. Hurtte Jr. who has 28 years of distribution industry experience and […]
I resolve to: Set prices according to the value we bring to customers, not according to my costs. Use the rich data I have in my transactions and CRM interactions to better understand my customers’ needs, how they react to prices and offers, how their prices compare to similar customers and situations, the reasons we […]
Earlier this month there was an article in the Wall Street Journal, Why Gadget Warranties Are (Almost) Never Worth It, pointing out the disadvantageous math behind most extended warranties and chastising sellers for offering them. From my perspective extended warranties are good examples of when multi-part pricing makes sense, and they can be a win […]
I have written a number of blog posts about pricing strategies and business strategy in general. Setting strategy is fundamentally about making choices regarding where you compete and how you win. A very important part of making those choices is understanding how those choices affect other market constituents over a longer term. More specifically, considering […]
Salespeople go into negotiations with professional buyers on a daily basis, most without real negotiation training. Further, many sellers and their managers don’t really believe negotiations play a role in their world. But they do. The following article discusses why Distributors need to revisit the lost art of negotiation. Excerpts of the article authored by […]
This is the first in a six part blog series on how manufacturers and distributors can apply Six Sigma methodology to the pricing function to generate repeatable margin gains. A disciplined process is needed to create Pricing Excellence – SPA’s Six Sigma training drives real results focused on profitable growth. “Measure of success at strategic […]
A recent article in Business Insider, No one pays full price anymore – and it’s terrifying companies, highlighted the perils of discounting. The conclusion of the article was “Consumers just don’t want to pay full price for anything anymore.” While the pricing strategies of most retailers rarely start with discounting, they have trained their customers […]
Earlier this month Turing Pharmaceuticals raised the price of Daraprim from $13.50 to $750.00, an increase of more than 5000%. There were immediate outcries of price gouging from customers who take the anti-malarial and HIV drug, insurers, doctors and politicians. In the wake of the backlash, Turing reversed course last week and returned the drug […]
This is the third in a six part blog series on how manufacturers and distributors can apply Six Sigma methodology to the pricing function to generate repeatable margin gains. This blog covers what to consider in building measurements and a metrics plan for pricing team member assessment and incentives. All pricing practice leaders know a disciplined […]
Pricing strategies that trick customers cause disssatisfaction | Strategic Pricing Solutions
Last month I wrote a post Dealing with Customer Complaints in which I mentioned some personal dealings with Verizon that were unsatisfactory. In the post I wrote that it felt like playing Hunt the Wumpus. I also refer to it as a Where’s Waldo pricing strategy. I know Waldo is in there, in the form […]
Inside SPA: The Epicor-SPA Program | Strategic Pricing Associates
For every product, for every customer, there is a price that produces the optimal gross margin – the highest margin you can obtain while retaining the customer’s business. What that price is depends on multiple factors, from the amount of business you do with a customer annually to the particular item being ordered. Up until […]
Fire Low Margin Customers as a Pricing Strategy? Not a Good One. | Strategic Pricing Solutions
A somewhat popular tactic of companies looking to improve their margins is to identify their low-margin customers and fire them. They don’t go Donald Trump on their customers and say “You’re fired.” Instead the companies jack up the prices of those customers to either drive them away or make them profitable. Some companies even erroneously […]
Pricing Complaints - How to Respond | Strategic Pricing Solutions
If customers complain about your pricing, should you do something? A few things have occurred recently that have prompted me to write this post. In early March a bill was introduced in the Senate, Forbidding Airlines from Imposing Ridiculous Fees (FAIR) Act. A few days later I overheard two guys in the gym complaining about […]
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