Pricing & Value Benchmarking
Whilst most companies regularly engage in benchmarking their performance in key functions, such as Manufacturing, Supply Chain or Quality, it is surprising how few have really invested in benchmarking their Pricing & Value performance, considering the fact that a focused Pricing & Value practices benchmarking is probably the strongest & fastest lever to improve the company’s competitiveness & bottom line result.
Strategic Value & Pricing Benchmarking should cover two key & complementary efforts:
- Pricing & Value Competitive Intelligence: to be able to position to position your Value Propositions & Prices of individual products optimally vs competitive offers
- Pricing & Value Management Practices Benchmarking: to continuously the performance of your Pricing & Value Management organization, processes & tools vs ‘Best Practices’ and ensure that your company can make it a source of competitive advantage over the longer term
Value & Pricing Competitive Intelligence
Pricing & Value Competitive Intelligence aims not only to grasp what consumers are willing to pay for the products and what key attributes of the offer create the value in their eyes, but also to monitor what leading companies within the industry are able to charge for competitive, and how they are gradually adapting / improving their Value propositions. Along with exploring the actual standards in terms of the purchase price, price benchmarking also involves identifying all the reasons and rationales behind the price, including the costs of production and other expenses incurred by the industry leaders.
Engaging in Value & Price benchmarking on an ongoing basis is very important, since Offers & Prices are regularly changing & redefining the ‘Competitive equilibrium’. Changes may be necessary to reflect shifts in consumer preferences, Changes in competitive offers, and even the cost to produce goods and services. By taking the time to use Value & Pricing benchmarking to make sure our offer remains competitive & that its Price adequately captures the Value perceived by customers, a company can minimize losses of revenue due to adverse competitive evolutions, while also taking advantage of trends that would justify a price increase and allow the company to make more profit per unit sold.
PriValEdge Competitive Intelligence services can support its clients in collecting or exploiting such Pricing & Value Intelligence or alternatively, PriValEdge can assist its clients in setting up their own competitive Intelligence systems to support more effective Pricing & Value Management over the longer term.
Value & Pricing Management Practices Benchmarking
Finding a better / optimal price for one product is can, most of the time, be achieved with sufficient Market research & analyses & insights… Implementing & Sustaining effective Pricing & Value Strategies over the long term takes discipline, organization, processes & systems that together enable continuous performance for the portfolio of products. To Get there, companies need to climb up the ‘Pyramid of Pricing & Value Excellence’.
Benchmarking Pricing & Value Management practices can be key in helping your company get there. At PriValEdge, we go about it with two powerful approaches:
The Value & Pricing Audit & Roadmap, which
•Provides a detailed price audit of all relevant aspects of the current P&V processes vs ‘Best Practices’
•Initiates the development of a P&V infrastructure (i.e. review and improvement processes) that complements the intention of the P&V management tools
•Develops the P&V Strategy Roadmap to outline the path forward over the next two years as The Group gradually improves its level of P&V performance.
•Establishes priorities and action plans for moving forward
The Pricing & Value Balance Score Card,
•Help monitor regularly & systematically the performance & Impact of your Pricing & Value Management strategies…
•… but also monitors your performance in terms of implementing & following ‘due process’ in P&V Management…
- … and ensure that your P&V organization is constantly learning / evolving / improving to allow to sustain / Improve your level of performance.