What defines a company as a pricing champion?
A company that is really good at pricing!? Yes, but a champion of pricing can be defined further.
Although Pricing is a key focal point that they invest much of their resources into, the true pricing gurus understand the complexity of pricing. They understand that setting the price right is equally as important as the components that follow it. Which brings us to our first Step.
Step #1 - Market Research
Knowledge is power. All Pricing Champions have a methodical system in place when it comes to market research. They know exactly what questions must be answered and by whom, in order to consider the insight complete, true, & qualified for basing business decisions off of. They understand that this insight must include internal perceptions (within the company) as well as the external perceptions from customers, non-customers, and complete strangers. Simply stated, these companies understand this insight must cover everything, as it will serve as the first step to in their climb.
Step #2 - Setting Goals
Those that excel in growing their business have clearly defined goals - both short-term & long-term, putting an emphasis on “clearly”. Once the company has gathered the insight and analyzed it thoroughly, they are able to set prices confidently as well as set very specific high probability goals. But these goals span beyond pricing, pouring over into the other business departments. Departments such as marketing, which leads us up to step number three.
Step #3 Marketing Strategy
Every pricing champion has a sound marketing strategy to accompany any changes made to pricing and/or variations to their products or services. This in-depth customer insight allows the company to structure their marketing messages & their positioning according to their different market segments (defined through insight) or conclude whether a segment is worth targeting at all - Resulting in funds being spent strategically in profitable areas.
Step #4 Guiding Customers
Guiding customers takes place in the sales department. In alignment with the marketing strategy and customer insight, sales staff are trained to speak the language of the customer. Since the company has a good understanding of their customers perceptions and value drivers, they are trained to guide their customers to see the value in the product, while excluding price. Questions around price are carefully deflected until the customer sees the value. They do this, knowing the stronger the value they can create without pricing, the stronger connection the customer has to the product. This increase their demand and results in lower customer requests for discounts.
Tying these four steps together you can clearly see how one step seamlessly flows into the next. This is not saying excluding any of these steps will result in failure, yet it is simply shedding light on the importance of the first step, market research, and the role it plays in making confident, smart, and strategic business decisions that follow in your market. They are the same steps the pricing champions of the world have climbed to reach the top and become market leaders in their industries.