Additional fees can serve a positive business function, and increase profitability, but they can also create unnecessary problems if handled poorly. For executives, it is best to consider additional fees from a clear-eyed perspective rather than gut reactions of recoiling in fear or aggressively fulfilling one’s greed, as the author explains.
Stephan M. Liozu, Ph.D. (firstname.lastname@example.org), is the Founder of Value Innoruption Advisors, a consulting boutique specialized in value-based pricing, industrial pricing, digital and subscription-based pricing. He is also an Adjunct Professor & Research Fellow at the Case Western Research University Weatherhead School of Management. He is a Certified Pricing Professional (CPP), a Prosci® certified Change Manager, a certified Price-to- Win instructor, and a Strategyzer Business Model Innovation Coach.
This article describes lessons learned from a pricing professional’s several ride-alongs with sales reps in many industries. Although these trips were all unique in many ways, there were a few important commonalities that re-shaped the author’s thinking on the role pricing should play in a sales relationship, which he summarizes here.
Can you identify your best customers? It sounds like a simple question. You may think, “of course we know who our best customers are!” But what actually constitutes a good customer? Can you articulate it? The very customers who by one metric (returns) would appear to be the worst were actually the most profitable. Conversely, customers that may appear to be your best may actually be hurting your company. How can we tease this out?
Do your customers trust you? How do you find out? If they don’t, how do you build that trust and understand what your customers expect from you? In this article, the author outlines clear steps you can take to develop your customers’ trust in both your organization and your pricing.