You may be dusting down your crystal ball to help you predict what may happen to your pricing as a result of Brexit. Or you may be waiting it out, on the understanding that it will take some time for the ripple effects to be fully known.
For example, a weakened sterling may mean an increase in import costs for raw materials, and longer term, import tariffs might climb. Equally, for exporters, it could become cheaper to sell to other countries, yet export duties and import tariffs at the receiving country may rise. All of which might mean you need to pass on a price hike to your customers at some point.
What to Do To Prepare
At Pricing Solutions, our view is that rather than playing a waiting game, it pays to have good pricing practices in place right now. This may help you avoid a knee-jerk reaction later on; something that’s purely based on looking at your input costs and adding a markup. Instead, we advocate considering a more value-based approach as, at the end of the day, your customer is most inclined to judge you by the value you deliver.
If you already sell on value but feel you need to start using cost-based arguments in the wake of Brexit, you may lose the moral high ground. While your competitors may want to implement blanket price rises, you should aim to be smarter and think of other ways to maintain your bottom line.
How to Prepare
We have helped several of our clients implement a value-based approach to get ahead of the competition, including a major distributor. Operating in a challenging market, where a straightforward price increase may well have met with resistance, we worked with them to deliver a broader, more intelligent strategy.
How we did it:
- Implemented Tools: to assess customer value by segment
- Improved Win/Loss Analysis: encouraged clients to improve their win/loss analysis and showed them how
- Identified a Variety of Quick Wins: eg. reviewing customers who currently get high discounts who shouldn’t
- Applied our Pricing Power Tool™: to assess their position in the market and the viability of increasing prices
Tony Hodgson is Managing Director of Pricing Solutions UK, a highly respected international consultancy focusing solely on pricing, be it pricing strategy, research, training or tools. The company works with both national and international brands across many sectors – what they have in common is a desire to improve their pricing practices. Get in touch with us today