I founded Atenga because I wanted to make pricing practical. What I learned in business school and reading about pricing was way to academic. Not something I, as an executive in the several companies I have managed, could use.
The process we developed works every time. Among the ~500 projects we have done, we have 499 references. We work primary with small to mid-sized companies, about 60% of our clients sell B2B, and about half sell services.
The process is all about replacing gut feel and guesses with hard data
Here are the steps below:
- Research: In order to price right, companies have to do research into their marketplace. The research need to anonymous and it has to reach statistical significance.
- Willingness to pay: Using advanced research technologies, it is possible to accurately measure what a marketplace is willing to pay for just your product or services and specifically for the unique benefits your product or service provides to the customers.
- Drivers: A driver is something about your product or service that influences your customers' willingness to buy and to pay. Decision drivers increase willingness to buy, value drivers increase willingness to pay. Drivers are not limited to product/service features/functions/benefits, but they are also how you position the company, how you go to market, your marketing messages and how customer perceive your company and product/service compared to competition and alternatives.
- Segmentation: Deep and detailed segmentation based on socioeconomics, value drivers, decision drivers and willingness to pay generates a treasure trove of hard data about your market.
Tying it all together: From this process you get:
- What market segment has the highest willingness to buy and to pay. What product features/benefits and marketing messages resonates specifically well with this segment and where, and how do they want to learn about your product or service.
- What specific price level will generate the highest market share, what specific price level will generate the highest revenue and profits.
- What specific pricing structure generates the highest market share and revenue.
- What marketing messages and positioning statement is most effective in driving conversion.
- How much will your pricing of one product/services cannibalize sales of competing product/services. How can you set your pricing to minimize cannibalization of your other products/service.
In short, you get a recipe for how to price "right", how to market "right" and how to sell "right".