Is There a PERFECT Pricing Model?
The question of the right pricing model is a topic of heated and controversial debate in the pricing community. There is no simple answer to this question - but here is what you can look out for.
How High-Tech Companies Can Defy Macro Pressures, Grow Revenue and Margin
An inauspicious start to the year has been especially troubling for high-tech manufacturing, software and services companies. The uncertainty in the economy right now is a universal burden, but high-tech firms that have spent more than a decade riding the wave up are suddenly faced with tough decisions and sizable threats to the top- and bottom-line. In this article, we uncover how AI and data science can help companies capture more margin and revenue despite external economic challenges.
3 Short-Term Pricing Wins and Where Teams Get it Wrong
At the start of each year, most commercial teams are looking to get a running start on strategic initiatives with price and profit improvement. However, before pursuing quick wins, you should ask your commercial teams these key questions: how effective will this strategy be in the long-term when economic cycles shift, are sales teams well-equipped to communicate these changes in a way that is fair to customers, and what would the impact of these changes be on long-term customer satisfaction?
Are You Pricing Your Products Correctly?
Often, pricing strategies waste potential because they price products purely based on value. This article explains why this strategy falls too short and how behavioral pricing can open up additional potential for your pricing strategy.
After the price hike frenzy, it’s time for precision pricing
Economic conditions are shifting fast, and an indiscriminate approach to pricing will not be a viable performance-enhancing lever in the foreseeable future. Consumer product (CP) companies will need to embrace a more structured, disciplined, scientific, and surgical approach to pricing. We call it “Precision Pricing.” The basic principles and practices presented here will help you navigate the next economic cycle more confidently from a pricing perspective and will put your organization on a path to building differentiated capabilities that will serve you well in the long run, as the authors explain.
Implementing Successful Price Changes
Every commercial leader understands the effort that goes into setting the right price, so it’s important not to overlook some basic actions to mitigate the risk of falling short of your goals. In this article, the author outlines three critical steps for determining the effectiveness of your pricing initiatives.
Getting Everyone Onboard for Price Increases
Customers want the best value, not necessarily the best price. Our job is to justify the price based on the value we deliver. Often customers do not know or purposely ignore this. This includes the product, services, support, and terms and conditions we offer. Getting a lower price from a competitor is not the same as getting the “same value” at a lower price. Knowing and communicating your unique value proposition is key in implementing price increases, as the author explains.
Something’s coming: How US companies can build resilience, survive a downturn, and thrive in the next cycle
The U.S. economy continues to throw off mixed signals. But one thing is becoming clear: executives should prepare for an extended period of higher interest rates. This article was originally published on September 16th, 2022. This article represents views from McKinsey’s Risk and Resilience Practice, Strategy and Corporate Finance Practice, and McKinsey Transformation.
Pricing with Confidence: Second Edition
This article on “the inflation imperative” is an excerpt from the second edition of Pricing with Confidence, due to be published in October 2022. Pricing with Confidence: Ten Rules for Increasing Profits and Staying Ahead of Inflation was written by Reed K. Holden and Jeet Mukherjee of Holden Advisors, with the intent to provide readers with the tools and resources required to build an organization that executes well in the face of volatility.
Solving the Paradox of Fair Prices
Charging different prices is often fairer than charging everyone the same price. While there are no standard answers to the question of what makes a price fair, business leaders can embrace market transparency, understand what drives the perceptions of fairness in their market, and ensure that they offer prices that customers will perceive as fair. With the right understanding and the right approach, companies can vary prices in ways that mutually benefit themselves and customers, and perhaps society as well, as the author explains.