Pricing is the fastest, single most effective way a company can impact its profitability. Implementing a major marketing and advertising campaign may increase revenue; downsizing may cut costs; reducing manufacturing costs may make you a little more profitable. But effectively managing the price of your products and services will have the fastest impact on your profitability!
Here’s a fact: Raise your prices 1% and you will see a 12.3% increase in your product’s profitability.*
*(Based on the Standard & Poors 1000 Index, average pricing structure, and cost data. Your pricing structure will differ.)
- A 1% increase won’t be noticed by your customers, will it?
- Why not raise prices 10%?
- When will you get push-back from your customers?
- Your sales staff?
BioPlan Associates can determine your customers’ price sensitivity by market segment.
Benefits of Pricing Right
Effectively manage your product and services pricing:— You will be offering pricing packages and strategies that your competitors can’t touch. Deliver real value to your customers.
Get total security in your pricing decisions:—You’re pricing and delivering value—based on what your customers demand and expect.
Satisfy yourself, your senior management, and sales team that your price increases are justified: —Because you’ll show you’re offering real customer value.
Increase your company’s overall profitability.
Pricing strategy should be based on customer value, product mix, your branding strategy, and the quality message you deliver. Life sciences companies, in particular, should design flexibility into their pricing strategies and develop ways to handle the rapid changes and uncertainties in this business segment. Even for technical and novel products, pricing sensitivity analysis is a repeatable and methodical process. Our cost-effective, customer-based approach to pricing analysis gets you the market information you need to leverage this marketing tool and achieve the financial results you expect.
Pricing is an under-managed activity in many companies:
- Pricing is not seen as “manageable”: It’s often done reactively; when the competition raises prices, or when customers complain.
- Times have changed: Companies used to be able to generate acceptable returns without smart pricing—not any longer.
- Pricing is not approached methodically: Effective pricing requires clear knowledge of your market and customers.
- Poor pricing is difficult to detect: Determining that you are under-pricing is not an easy task to undertake.
- Front-line marketing staff often have no incentive to manage pricing: Increasing prices risks losing customers and will not make your sales force’s job any easier. Further, if the marketer is wrong and the company loses too many customers, the marketer could be blamed.
Want help selling your product or service? Use our independent analysis to show your prospect how well your product will impact their return on investment.
Establishing a clear business case for your products, or an ROI to your clients in a technical market, is challenging. BioPlan Associates can work with you to define and quantify the actual, documented value that your solution, product, or service brings to your customers—the ones they value most.
Quantify the key business elements that make up your ROI-based business case. Many companies claim to deliver superior value. While it may be true, you must be able to prove such claims. You will need to objectively demonstrate that your products and services yield economic benefits to your customers, either by reducing costs or stimulating revenue.
You receive the validated, customer-based data using your product’s performance along with independent verification of your service’s effectiveness. You will be able to deliver quantified, validated claims about your product’s performance!