10 bad pricing practices that cost millions dollars every year to societies

1. Sales people cannot easily find the target and walkaway prices for each deal
2. Price is aligned with (or below) competition without consideration of customer value perception and service differentiation
3. Quotes are based on the ‘‘average shipment’’ without consideration of true shipment profile, causing up to 5% errors in profitability simulation
4. No systematic workflow to enforce pricing pollcy and review/approve quotes with pricing exceptions or non standard costs
5. Negotiated tariff is not correctly implemented in the billing system which results in customer claims, extra work for billing staff and money left on the table
6. Customer trade is not systematically monitored versus commitment
7. Unprofitable customers are not identified and re-rated
8. Customers at risk due to price significantly higher than market price are not identified and no action is taken to retain them
9. No specific KPIs and systematic reporting to monitor pricing performance. Sales people do not receive incentives to sell at target prices
10. No data-driven process to adjust pricing policy based on updated costs and market conditions

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>