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5 Levels of World Class Pricing
One of the core tenants of our pricing philosophy is that pricing is a process and as with any process, performance of the pricing process can vary from organization to organization or even within different business units of the same company. Pricing Solutions has developed a unique offering we call World Class PricingTM that provides a series of benchmarks to assess pricing process maturity and develop a vision for improvement, and the milestones along the way.
World Class Pricing is the pursuit of excellence in the execution of the pricing process. Establishing the management system our clients need to ensure their offerings are optimally priced every day is the essence of World Class Pricing. An effective pricing process gives them the confidence to know that their team is making sound pricing decisions consistently. It is impossible to maximize profit without optimizing pricing, and it is impossible to make the transition without linking the changes to processes, tools, technology, and company culture.
An effective pricing process:
- Is value based
- Considers customers, competitors, and costs
- Is fair and equitable to all customers
- Is efficient to execute
- Has measurable outcomes
- Is repeatable
- Delineates accountabilities
- Links to other business processes, such as business planning
- Maximizes profit
The majority of companies are operating at Levels 1-3. Based on our project work we have found that a 10:1 payback is typically achieved on projects that move you up a level. We have also found that this payback is typically achieved within 12-24 months and continues to deliver as the company reaps the rewards of superior pricing.
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