As we are approaching the last quarter of the year many companies look at increasing their prices for the coming year, in particular in B2B industries with cyclical negotiation cycles. But price increases are not always easy to implement and more than half of all price increases either fail outright or get neutralized by heavy discounting.
Most people working in the pricing department is aware that pricing is a very powerful tool. Yet still, when engaging with other departments or discussing the overall strategy of the company, price improvements are sometimes ignored, or at least its full value is not appreciated.
We are excited to announce three upcoming webinars in June:
- June 5th: Pricing Right Made Easy - Optimizing prices with research: learn about how to use price research when setting prices, including using different research methods. See how segmentation along customers' willingness-to-pay can drive superior profits..
- June 12th: Value-Based Pricing foundation done right: Conjoint Analysis: Build a solid foundation for your value-based pricing strategy by implementing regular price research using conjoint analysis. Understand value-drivers and differences in willingness-to-pay.
- June 19th: Increasing prices more efficiently with research: price increases are sometimes difficult to implement. In this webinar we look at how you can become more efficient and achieve a higher proportion of the price increase potential through price research.
You can learn more about each by clicking on the links and signing up. Once the webinars are live you will receive an email with a personal link to watch the streaming video, at your time and convenience.
Take the Guesswork out of Pricing
Do you have the right price for existing products or services? Do you know what the price should be for a new product yet to be launched? Are your customers willing to pay more for a given set of benefits? If you measure willingness-to-pay scientifically you will be able to answer all of those questions. Yet, still 88% of all companies admit that their pricing process is at least in part based on guesswork, without knowing what customers value and how much they are willing to pay for an overall product, or for a given set of features.
This is the time of year when many companies are planning or executing price increases for the new year. Some are successful and reap considerable improvements in profitability. Others have difficulty in making the price increase stick. And others simply fail to implement a price increase.
Over many years working in the pricing industry, I have seen a number of things that successful companies do when it comes to implementing the price increases. Here are some of those insights.
Fact: Most companies should increase their prices.
Increasing prices can be daunting, and is certainly not a fun thing to do. Customers will get angry, some will have feelings of betrayal, and there is lots of uncertainty and risk. Just how angry will your customers get? And to what extent will this anger translate into churn?
Consequently, price increases tend to be postponed or avoided, despite the obvious opportunity for a profit increase.
Chances are you are not like most companies, and therefore shouldn’t increase your prices. Doing preliminary pricing research is essential so that your price increase is an informed decision, and not just based on your intuition.