Tired of watching half of your potential profits end up as ‘money left on the table’ because of uncontrolled Pricing Leakages?

Discover PowerPricer : new ‘State of the Art’ pricing software from PriValEdge

  • Visibility & easy access to all you Pricing + Discounts & Rebates data
  • Powerful & flexible Pricing management, budgeting, monitoring & controlling
  • Optimization of Prices, Discounts, rebates & promotions based on Science & facts
  • Effective Quoting & Value Based Selling support to sales force
  • Ability to simulate & support decision making with interactive models
  • … and much more (see by yourself)

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Getting Ahead of Your Competition Through Pricing Analytics

Plenty of revenue is lost through inefficiencies in business. Close to the top amongst the profits that could have been … but did not, inadequate pricing strategies is a major cause for many companies to miss out on the 'low-hanging fruit' / “leave too much money on the table” from direct sales to their established customer base.

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Is Your Pricing Strategy Optimal to Support Your Strategic Objectives?

A lot of companies lose out on potential profits by pricing too low, lacking understanding of what a customer is willing to pay for goods and services that they want. Many ad hoc attempts to improve income can fail or backfire without this awareness of customer value drivers.

Whether your objective is to increase your market share, improve bottom line, strengthen your resources and capital availability, or just meet sales targets, make sure your pricing strategy relies on value-centric predictive models.

The Targeted Pricing Strategy

For example, imagine for a moment you owned a retail store. You have a vast array of products on the shelves. At any time you could raise or lower prices to a reasonable extent. Some of these products aren't selling well. Should you lower prices to make them more attractive to buyers and grow volumes? Or Will your customers allow you to raise prices without changing the (low) volumes and improve margins?

is running a retail store just subject to the whims of customers? Or can you actually influence / predict how pricechanges will affect demand & bottom line?. Raising prices might cost you a sale and have them walk towards your competitor or could simply result in higher margins.

Pricing & Value management science can help develop better (not perfect… but better) ways of managing this fine line.

Why is that product not selling? Is it because of the packaging? Is it because other products are cheaper? This means that the product does not feel particularly valuable to your customers. Lowering prices might make it look even less valuable. Remember the old saying, caveat emptor – let the buyer beware. As you lower the prices, it influences what the customer may believe about the quality of a product.

You need to be more value-conscious than just price-conscious. Even the customer that professes to be a bargain hunter will often judge products based on

a) how much can be obtained for a given price;

b) the quality of the product for the price;

c) and the time and effort spent obtaining the product.

Meanwhile, the customers who are in a hurry or want the best quality items will hardly be moved by the lower price. In fact, raising prices of better quality items would make those lower-priced items look much more attractive without changing their price.

Customer segments more concerned with quality will likely not even notice the slight change in price, meaning improved profits at no loss to your sales volumes. Price-conscious customers would pick the  lower-priced item because it appeals to what they deem valuable. People who buy according to need feel privileged by being offered choices. Some items or stores do better when they serve as status symbols.

In general, this is why people don't obey the bell curve of pricing and demand. Lower prices don't mean increased sales. With Pricing/Value research you can understand how customers make purchasing decisions using both logical and emotional factors.

Customers are not a monolithic block. Effective pricing strategy takes advantage of the fact that different people have different priorities, and will pay more as you meet their specific needs…. By providing different / targeted value propositions (.. at different prices)

When you make changes to your pricing strategy; no matter if you work in retail, business to business, or as a manufacturer; remember that maximum profit lies in appealing to specific market segments. You can often adjust prices to appeal to one segment without impacting sales in another.

Effective Pricing Policies are Value-centric

Value capture is about offering customers the best price they can afford for the level of quality they can expect. This is how you can raise prices while still keeping all your customers. It is also how you can improve sales and manage the image your product conveys. How can pricing research help you meet your objectives?

Do you want to increase your market share? Always trying to undercut your competition can be unsustainable, and worse yet- impact the perception of quality of your product in the eyes of your clients.

Do you want to strengthen your business resources and capital availability? Are you really getting the most out of your marketing investments?

How about meeting quarterly revenue targets? Is there a way to improve income without having to drive the sales force harder or sinking funds into a marketing bonanza?

And of course, developing and releasing a new product is a key moment when awareness of customer needs / value drivers, competitor performance on key attributes, and willingness to pay may be the difference between success and failure.

PriValEdge can help you significantly improve your bottom line with improved pricing policies and better client conditions.

Learn more on http://www.privaledge.net/services/pricing–value-capture

Pricing Analytics – objectives & case studies

Pricing Analytics Objectives

Objective: Developing better prices & value propositions…

The perfect Price

•Is coherent & below ‘perceived value’
•Leaves no money on the table
•Anticipates competitive reaction
•Is fair
•Exceeds costs (and the cost of capital)
•Supports our strategic objectives (Growth/Margin/Profit trade off)

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Pricing Research to Maximize Value

Price is not just the ‘’4 p” component used to capture get a just remuneration for your products or services, it is also,to many a key driver of your image and Value perception. This is why trying to undercut the competition by always pricing below their market rate doesn't always work. People buy because of rational and emotional factors, and to many price represents a promise of quality. People buy certain things because they are expensive, and feel good about it. People have expectations of quality goods, and if a company has a reputation for delivering quality goods and services, they may choose it over the competitor despite higher prices.

When comparing prices, different elements help people switch from the mindset of those looking for the cheapest price and into that of wanting to maximize the value of what they can get.

Pricing research is about finding what customers deem valuable, and the corresponding price they are willing to pay.

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