Pricing the Trump Effect | Strategic Pricing Solutions
Now that Donald Trump has been elected to be the next President of the United States, companies are looking at his campaign promises and cabinet appointments to assess what it means for their business. In particular, companies are anxious about how a Trump Presidency will affect their cost of doing business. This is all happening at a time when many companies are setting their base prices for 2017. My advice is to remember that pricing is not a cost-based exercise. Your pricing strategy should be aligned with how you compete and how you provide value to your customers. Consider whether your customer’s perception of value could change, and if so by how much. Let that guide you in setting prices.
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The most likely scenario is you are competing with domestic and global competitors, and the impact of the Trump administration will be inconsistent. In that case, consider the problem from the customer perspective and work backward. Before considering prices, try to quantify how your product or service affects your customers’ results. If you enable customers to generate revenue or control their costs more efficiently than they can with the best alternative, quantify how much that is worth. Then make sure that is aligned with your prices.
If your prices are already aligned well with your customers’ value equation, don’t try to raise prices just because your costs increased. On the other hand, I find that client prices are not always aligned with the value equation and they actually have a little room to raise their prices. Make sure you do the math, though. Raising prices when there is not a supportable value difference can frequently cause customers to defect.
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