Do you know that lack of pricing strategies and weak pricing plan can damage a company. But, it is not essential that someone is going to notice the core issue. You can improve your pricing and sales by planning the pricing strategy and implementing it in the right way. Consider b2b companies or vendors who are striving for profits due to extreme competition and low business productivity. What they are missing is that they aren’t evaluating historical data, current shortcomings and lack of achieving targets. The reason that you haven’t been able to close a deal lately, it might be possible to mismatched pricing strategy.
Improving business can only be implemented after carefully analyzing several related factors, for example, buyer’s persona, identifying value metric, testing prices, tier pricing, customer demands etc. There are different pricing strategies and companies can choose any strategy of their choice as they deem it fit for their business.
B2B Pricing Mistakes are Failing Companies and How?
Businesses need to survive in today’s ever-changing atmosphere and competitive business environment. It is important to leave no stone unturned and focus on strategizing the pricing. They have to set prices over the value of offered products and services. Many companies indulge in B2B pricing mistakes without even realizing. A company might be charging very high for its products or even lesser price but it doesn’t make the cut either way. We are focusing on developing a pricing strategy that adds value into your business and customer also feels that he is receiving value as a return. Use your pricing strategy to maximize your b2b sales and profit margin, but you have to understand the B2B Pricing mistakes that you are making.
There are different challenges related to pricing strategy. Most of the B2B companies make a few common mistakes in developing their pricing strategy. It is also reported that only 30% of the companies are using smart pricing strategy and running a successful business.
You have to understand what you might be doing wrong in order to correct your B2B Pricing mistakes?
Identify and Align your Value Metric
Recognize your value metric and any failure to do so will automatically result in the maladjustment of your pricing strategy. Value metric can be simply understood as something that defines the value of your product or service and how you are charging its value. You need to determine and identify the true value metric in order to make sure that your consumers will be drawn towards buying it. Value metric is reflected in the pricing strategy because it should be aligned with the needs and demands of customers. If you are providing their desired services, then it will result in a successful value metric identification.
Does “One Size” Fits All?
No, it clearly doesn’t. But companies are making this most common mistake in their pricing strategy. In this way, you are risking your business, because your customer is going to your competitors for better services. You can prevent this by using an adaptive pricing strategy, which means that you have to identify multiple customer segments. You have to appeal to all the segments with the same zeal but different pricing depending upon the buying capacity and demand of target customers. Pricing for multiple products is dependent on the “value drivers.”
- Time consumption
- Productivity of Workflow
- Technical Abilities
- Logistic and Labor costs
The main reason behind the propagation of this idea is the result of the notion that price is also one of the attributes of any product or service. Which means that different products using different material are used to attract multiple audience segments. Pricing is the best tool to appeal to consumers to understand their sense of value and to increase profit.
Assorting too Many Options to Correct B2B Pricing Mistakes
Ah! The ultimate question of existential nature again…how much is too much? Well, it’s never enough but too much cluttering can cause confusion for the soundest of minds. Clear and transparent pricing is not always fluctuating but creates value perception in the minds of customers. If you are going to apply the adaptive model of pricing, then don’t go for excessive options in the pricing. It can cost you your customers and you can risk brand reputation. Understand that your potential customers are looking for solutions and you have to make it easy for them.
Don’t Give Discounts: Is It What It Looks Like?
Don’t get us wrong but I mean is it really what it looks like? We believe in being grateful and returning the favor. But, why risk losing your “crème de la crème” customer base by appearing too eager to sell. You have to maintain the name for your brand and be very careful in creating awareness about the company. It is proved through different studies that offering too many discounts can give an idea to the customers leading them to expect lower pricing from your company. Set an impactful precedent for your customers by increasing value and demand through pricing.
Is Pricing a Trap for Businesses?
It would not be wrong to say that pricing could be a Trap at times. Choosing the right price for products and services is definitely the core function of running a business. It offers extra value for the consumers.
Recently Harvard Business Review reported about a study that was conducted on 1700 companies and it revealed interesting and startling results related to pricing. It was surprising to note that 85% of the people were of the view that pricing strategy and decision making needs improvement. There is a dire need to reevaluate sales, incentives for customers, pricing tools, pricing features and how to track pricing structure for productivity purpose. We will be utilizing the report as a case study to understand the effect, impact and influence of pricing on success and failure of top-performing companies.
How Pricing Leaders Win the Game?
It is essential to understand the capability of products in order to excel at the top of your game. Which means that you can increase your share in the market, inculcated dynamic pricing and execute the price increase to analyze all the situations differently. It was implemented that the top-performing companies are focusing on three giant areas in the industry. The results were derived to review the performance of companies at large and also analyze their pricing strategies. It included certain factors involving the creation of a pricing strategy:
- Tailored Pricing and Customized Pricing for customers
- Align incentives with pricing
- Fixed and variance in pricing
- Investment in pricing capability and value metrics
- Integration of pricing and sales tool
The development of the pricing strategies may have a different impact concerning above-mentioned factors. To excel at pricing, you have to provide a more customer-centric and personalized experience. It was analyzed in the report that these factors were contributing to the increase in profit of top-performing companies. Which means that the 78% top-performing b2b companies were using these approaches in their pricing strategies. To increase price effectiveness, you don’t have to make it low or high, it involves a careful analysis and consideration. That’s one of the core reason that nowadays, recent pricing trends in the b2b industry are recommending Omnichannel online platform with integration of sales and marketing. It also enables the businesses to set customized prices and control the visibility to target the right kind of audience.
Create Pricing Value for Customers
It is usual that companies focus on creating more value for their brand by promoting their services and products. But, you cannot possibly treat every customer in the same way, that’s one of the key reason that you have to tailor prices depending on the needs of the target customer. If you have a customer base with segmentation, then you have to maximize profit margin by offering tier pricing. It means that a variable pricing strategy for each group leads to a more diversified way of doing business and targeting the consumers. It makes your customers feel special and shows your interest and focus on their needs. It translates into success by creating value for the customers.
Competition is very high and intense in the industry, which means that someone else might be eyeing your customers. You don’t have to lose customers due to weak pricing. You have to develop organized pricing to earn maximum profit margin. The true profitability is not that you have sold a maximum number of products one time, but it means that you have to keep selling the service or products and customers keep coming back for the purchase. You have to consider the market atmosphere, customer’s position and your own interest in order to raise the prices. You have to track your own pricing strategy in order to improve your profit and find any way to increase the profit rate.
Best Pricing Strategy and Cut Unprofitable Incentives
One cannot stress this enough that whatever image you put up of your brand speaks volumes about your company’s values. It is also important to set value-based pricing. In addition to this, it can be said that incentives play an integral role in devising successful pricing. Because a constant provision of incentives and frequent discounts can give away the idea that your customers might be expecting low prices from you. You have to be very clear about the discounts offered on pricing and incentives. There are principals that you have to follow while setting objectives for the pricing.
What can you do to clarify the objectives in devising your pricing strategy?
- Meet customer’s needs and generate more revenue
- Set various pricing rates for different target customer segment
- Identify your top customers and invest in them for incentives
- Make it transparent to customers that they are receiving value for their money
Track your customers by giving incentives and bring back the lost customers, if pricing was an issue. This could be done in a more analytical way, if you have done research, analyzed and evaluated the data and information related to the pricing and its results as profit or loss.
A Bulletproof B2B Pricing Strategy: Optimize Pricing
The times have come when online software tools and automated business solutions will be replacing sales teams. You can devise precise and bulletproof pricing, as it can help you perform in an outstanding way. Now, you can optimize pricing with help of pricing tools and software to lessen the risk of any discrepancy or error. It helps you save costs and analyze your compensation. The tier and customized pricing become easier as well as analytics is thoroughly examined to save time.
It would not be wrong to say that the value of prices and decision making is done by the tools, as the results act as a vital catalyst to resort to the analysis given at the end. Imagine having full control over a functionality to control make specific prices visible to a specific target audience. There are several social networking and business networking platform. SeeBiz is one of the best business networking site offering an Omnichannel platform. It is a multichannel network for b2b vendors such as manufacturers, wholesalers and retailers. You can select prices and set privacy to make it visible to your selected group of customers. It has lots of interesting features that enable you to run multiple organizations, manage online inventory, generate reports and keep track of selling and purchasing with the order management system.
Tools, customer behavior (interest, demand, needs) and resources can play an important role in generating a pricing strategy. Pricing is not something episode but it should be updated over the period of time as per latest industry trends and demand. You have to be very precise while making pricing strategy. If you are looking for an online solution to connect with larger b2b audience and pricing tools. We have it all here for you. Register today to manage value-based pricing with automated tools!
Powerful and Value-based Pricing Tools at SeeBiz.com