Pricing software has evolved immensely in its use and sophistication over the past twenty years. It can enable a firm to implement and enforce complex pricing policies, can enable a sales rep to justify price based on value, and can track whether what customers pay is actually what they agreed to in a contract. But, contrary to what a vendor may claim, pricing software will not necessarily make your business more profitable.
In a recent webinar, Improving the Value Propositions for New Products, Dick Braun described Parker Hannifin's WinStrategy, which transformed the company into a top-tier financial performer in the manufacturing industry. Key to its success was elevating strategic pricing as a corporate initiative taken seriously from the CEO on down. An important component to WinStrategy is Winovation, a value-based process during the product development phase that allows Parker to truly capture their value through price.
The ability to measure and communicate value will help to neutralize your customer's obsession with price and give you sales team an edge on future negotiations. But how do organizations quantify value? This is a basic question for marketers and sales professionals that are seeking to sell on value and rely less on price. Using customer and competitive insights, we've developed a proven step-by-step process to enable organizations to express, in economic terms, how they are able to deliver superior customer value.
A customer service software company latest product represented a "bet the farm" strategic decision. Enhancements to functionality and user interface were supposed to differentiate it. However, the initial value model showed a huge negative value to their customers due to retraining costs and lost productivity as veteran agents learned a new technology. Using the LeveragePoint application, management uncovered this surprise early, and uncovered additional, and much more powerful value drivers that allowed them to prove positive value to their customers.
Laurie Andriate is Vice President & General Manager of Grace Davison Materials & Packaging Technologies - Americas. In 2008, as Chief Marketing Officer of Grace Construction Products, Laurie was instrumental in deploying LeveragePoint for Value Management to drive the W.R. Grace performance mandate to accelerate growth through innovative products. Recently, we had an opportunity to talk with Laurie about the impact of LeveragePoint on her business.
Do your products and services deliver higher value than the competition? Make the most of your differentiation by linking price and value to set better prices and solidify your competitive position. The click is ticking and your competiors are catching up.
Read how a supply chain software company was able to achieve a 15% price premium over its closest competitor by linking price and value.
New product development has been identified by industry leaders as the most important opportunity for embedding value-based strategy to maximize customer value and profit. However, specialty chemical companies continue to face key challenges, including the commoditization of products, intense price competition, rising input costs, and relentless pressure from powerful procurement groups.
The pricing strategy domain has matured since 1980 when the first edition of the classic, The Strategy and Tactics of Pricing was published. Today, B2B companies aspiring to improve profitability through pricing can seek expertise from one of several consultancies as well as more than a half-dozen software solutions. Or, they may decide to build in-house capability by hiring certified pricing professionals from the Professional Pricing Society. Given these various options, what considerations should be taken into account in choosing a pricing solution?