Pricing Blog


Improving B2B Pricing Strategy

This white paper demonstrates how an effective B2B pricing strategy can improve your company’s bottom line and profitability in the long-term.

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Increasing the value of your private equity firm’s portfolio can be a complex endeavor. There are multiple levers to be pulled such as financing, product/service fit, human capital, etc. Yet one area of high EBITDA leverage that is consistently overlooked is pricing.

Last year, Apple’s retention rate was at the colossal percentage of 92. While your business may not achieve the retention rate this high, even a few percentage increase will make a significant change to your profit.

Pricing your product or service to a new geographic market may seem risky, but conducting research on psychological pricing can ease the challenge significantly.

Whether you are planning to increase prices or thinking to price a new product, conducting research is the key to effective pricing strategy.

This white paper demonstrates how an effective B2B pricing strategy can improve your company’s bottom line and profitability in the long-term.

More effective segmentation, and a pricing structure that responds to the specific needs of particular segments, provides an opportunity to improve both growth and profit in the long-term.

In today’s omni-channel world strong pricing controls are critical to capturing value. MAP & MRP policies are examples of ways companies are trying to keep tighter controls on price.

The term patient-centricity can be difficult to understand. We discuss the implications of patient-centricity on the US healthcare system.

Price increases can be difficult to implement but there are tangible steps you can take to ensure a smooth transition and get customers on-board.

Improving your pricing strategy is a dependable way for your organization to improve its bottom line & profitablity. We discuss several steps on roadmap to strategy improvement.

Leveraging price optimization for long term growth can be a complicated process. We discuss the importance of calculating the value of a long term customer relationship.

Pricing Research can help you discover new opportunities for your business. Here are 6 ways you can conduct research and get the most from your results.

Applying pricing psychology could help your business capture substantial profits. We discuss how to leverage pricing psychology and research to get your organization out of cost plus pricing.

It can take years to hone your pricing expertise. We’ve compiled a list of the pricing Learn which skills will improve your overall pricing capabilities and make you a better Pricing Expert

In this edition of Pricing for Researchers we discuss a study that evaluates different ways to manage promotions and shipping fees for online retailers.

Your customers may love discounts but are they good for business? We shed some light on the dark side of discounting and how they might negatively impact your business.

The newspaper and information publishing industry are finding it more and more difficult to maintain profitable in such an aggressive market. Experiencing intense pressure from advertisers and consumers, industry leaders are looking for new ways to capture value and maintain margins. One strategy that we’ve seen work is module advertising.

Today’s B2B sales landscape has changed vastly; relationship selling is dead and procurement departments are more stubborn than ever. We discuss how to win in such a volatile landscape.

Pricing wars can be costly to your bottom line and your brand. Apply these tips and minimize your chances of a costly battle.

The pricing discipline has been growing rapidly as companies realize that investing in pricing can have long-term payoffs. But investing in pricing research can be a costly endeavour. We discuss the best ways to make sure that your pricing research returns positive ROI.

With the announcement of Brexit came many unknowns. We discuss strategies that your pricing department can use to counter the ambiguity and achieve a winning pricing strategy.

How do you remove the uncertainty around pricing your products? Using effective pricing research of course. These tips will ensure you get the most out of your research projects.

Find out how and why your company should use big data to build better pricing strategies for your products and to see an increase in profitability.

Uber has been able to leverage dynamic pricing to revolutionize their industry. Read what we think are the most important lessons to learn from Uber.

Price transparency has been a hot topic, especially for retailers and healthcare professionals, this past year. Read why you shouldn’t fear transparency…

Apple are rumored to be planning the launch of the new MacBook later this year. So, how will they price it? Read our predictions here…

Pricing is a factor that has one of the biggest impact on retailer profits. Why should retailers price their products differently during the holiday season?

The strategy companies choose to price their products and services can be a key factor in their success or failure. How the IoT influences pricing strategy.

‘Black Friday’ has always been a focus of criticism and debate. However, this year the conversation shifted towards whether Black Friday discounts make financial sense for retailers.

Excess capacity is the bane of many industries. It can be blessing in disguise, though, once manufacturers figure out how to use it to their advantage without threatening their core businesses.

Are you making one of the three most common Pricing mistakes we see businesses making? If so, here’s our advice on how to correct them.

“Value” is an easy word to say in any industry. We all know you have to create it, communicate it, and capture it.

Luxury goods companies show that making pricing decisions amid extreme currency fluctuations is more than just narrowing the gap to reduce arbitrage effects

Many Associations and Non-Profits are faced with slowing growth and shrinking margins. But with better pricing, they can serve, not sell and see “Quick Win” pricing opportunities.

In the past 2 years a lot has happened in the world of Hep C treatment. How will pharma companies develop sustainable pricing strategies in the industry?

When a price increase tipping point occurs Premier League Clubs must rethink pricing strategy & apply innovative segmentation techniques to manage revenues.

Premier League football clubs are in a strong position to maintain price increases. Pricing Solutions applies the 5Cs of Pricing Strategy to see if the League is reaching a tipping point.

Managing price is increasingly difficult and complex for Medical Technology companies. Internal development of the pricing function, organization and skills is a must. Read our thoughts on the state of pricing in the medical device industry…

Quantified customer research is key to establishing the optimal price point and enables companies to capture more revenue. Companies leading the way in Pricing Strategy regularly conduct extensive Pricing Research. This is especially important in the Fashion industry, where customers’ perceived value can far exceed production costs.

Good Pricing Management is key to ensuring your lowest negotiated prices don’t unintentionally start a damaging pricing battle or war in your industry.

Set-up a winning pricing strategy: combine pricing tools with Pricing Excellence to create a Best in Class pricing strategy that empowers your organization to regain control of pricing.

Analytics and “big data” are everywhere, but a lot of businesses struggle to find any practical use for their data. We have identified five situations in which a business needs to make use of its data and implement an analytical process.

Companies must become more adept at developing pricing strategies that address the challenges of price transparency or be faced with conflict both internally with channel partners, and with end users

Many organizations begin their annual pricing process in July in order to be ready to start invoicing Jan 1st. By developing a pricing strategy as part of your annual planning process you can achieve profits well in excess of just taking a uniform increase.

Lessons on effective communication for Senior Executives to data crunchers inspired by the 2014 Predictive Analytics World Conference. Big Data, Analytics, sexy models….albeit sexy predictive models (that’s right, math models!).

Picture the following scene: it’s nearing year-end and company executives are immersed in high-level strategic meetings. The objective: improve company profitability in the coming year.

The holiday season brings out all types of shoppers. Understanding your diverse customer segments takes customized pricing research and tools.

In recent years we have seen the sporting world borrow pricing strategies from other industries, and vice versa. In such a diverse business environment what is the optimal pricing strategy for events, and what can other sectors learn from developments in ticket pricing?

Not long ago I thought it was time to “get personal about pricing,” and wrote World Class Pricing: The Journey. More than 20 years of experience and 700 projects went into developing a roadmap to pricing improvements that now all our clients use.

Successful price optimization requires scenario planning. This involves generating alternatives, modelling impact, assessing outcomes and choosing a result.

In pricing we talk a lot about developing an ‘outside-in’ perspective; the type of perspective that helps you understand what customers are willing to pay for. Pricing research provides critical insight into your customers but watch out for common pricing pitfalls.

Spring is an ideal time to revisit old pricing practices, assess their efficacy and commit to refreshing what might not be helping the long-term interests of your business, including pricing policies and strategies.

President Paul Hunt, continues his discussion of customers, competition, costs, capacity/cycle, explaining how the socialization of the 4Cs is essential to achieving buy-in to your pricing strategy. Paul also talks about common pricing challenges and mistakes, and explains how your organization can avoid them.

Paul Hunt, President of Pricing Solutions, discusses the importance of developing a well-articulated Pricing Strategy, the challenges of pricing globally and four key ingredients in an effective Pricing Strategy.

Quick acceptance or rejection of a new product is most common for everyday consumer goods. Speed of adoption can have a significant impact on the pricing strategy surrounding a new product launch.

As co-branding among retailers becomes more popular. We outline different considerations managers should evaluate before saying yes to that new partnership.

Good negotiation is a commendable talent, but businesses need the skills to deal with good negotiators. Protecting your profitability from good negotiators requires ardent compliance to pricing policies, a flexible pricing infrastructure and the ability to say “no”.

Far from being the first to take action, a true price leader is able to consistently execute pricing actions that result in the desired effect. Much like in a game of chess, a pricing leader devotes the time and resources to understanding the motivations and aspirations of its competitors and to building the skills necessary to think several pricing moves into the future.

Singapore: July 18, 2012 – Pricing Solutions Ltd., a leading consulting firm specializing in pricing strategy and well known for its World Class Pricing ™ Methodology and Price + Value Insights™, is delighted to announce the opening of its Asia Pacific Headquarters, located in Singapore.

We find that companies often treat bundling as purely a marketing tactic versus a component in a broader pricing strategy. It is not uncommon for companies to incorporate terms and features into a sale without understanding their inherent value.

On May 4th the Canadian government officially stopped production of the penny, and will now be using “Swedish Rounding”. There may be significant implications for pricing, after all a 1% improvement in price leads to a 12.5% improvement in corporate profitability for the average company.

Cost based pricing is relatively simple. The simplicity of cost-based pricing is what attracts many companies. But we think companies would benefit from slowing down before adopting such a pricing strategy.

The threat of commoditization is a reality for many marketers. We discuss pricing strategies that help marketers set prices to capture value.

Pricing Solutions is proud to sponsor the Pricing Management course under professor Vinay Kanetkar at Guelph University. In the past several years we have awarded a $500 prize to the best term paper. Congratulations to our 2011 winners!

Pricing low to gain volume is the oldest move in the pricing playbook. When does the price go so low that it communicates a lack of quality?

Pricing low to gain volume is the oldest move in the pricing playbook; the laws of economics say that as you lower price, volume will go up. Therefore many companies that want to dominate a market, or are in a rush to grow in a new market, will use low prices to achieve their goals (e.g. Walmart, Dell, Private Label).

If a consumer is shopping for an exclusive brand and likes the idea of buying smart, then many would conclude they can save some money by buying online from a country that sells it cheaper. However, the truth is that they probably won’t succeed; at least not online.

After a recent visit to the barber, I was reminded the importance of a strong value proposition. Here are 3 of the lessons I learned.

I was presenting at a conference recently and mentioned the Professional Pricing Society. A gentleman in the audience scoffed and could not believe there was such a thing! Well, believe it or not, there actually is a Professional Pricing Society and it has been in existence for quite some time.

Just when things were looking bleak for Netflix they caught a break as Bank of America came along with their debit card pricing fee. Bank of America has taken such a beating for that decision that if there was such a thing as a Pricing Piñata it would have their logo emblazoned all over it.

Pricing strategy is a hot topic these days. Over the past 20 years, we have helped many companies develop, refine or transform their pricing strategy, but today we get requests for help more frequently than ever before. So why the surge of interest now?

Are you at a cliff deciding whether you should cut prices to react to new market realities or stand pat and maintain gross margin?

Why does Chipotle charge a 200% price premium for their guacamole? We discuss pricing opportunities for the beloved burrito chain.

Finance Minister Jim Flaherty recently announced his desire to commission a Senate Committee into Canadian pricing. There have likely been a number of triggers for his reaction, but J Crew, a specialty apparel retailer, entering Canada at a significant price premium to its US pricing and subsequent reversal I am sure was part of the cause.

Good pricing means knowing where your power is. If the value is strong, there is an opportunity either to raise prices or grow share. If the value is weak, pricing must be adjusted accordingly to protect your brand. Otherwise, you risk becoming irrelevant.

It’s no wonder that Fortune 500 Companies are kicking off pricing initiatives at such a tremendous pace. The fruits of their efforts are continuing to make headlines. In last Friday’s Bloomberg’s Business Week there was a prominent article about the gains Goodyear has made by managing mix.

An increasing number of clients have been evaluating the Groupon model and trying to assess whether it is right for their business. This is a difficult question that often leaves high-level executives perplexed. In order to make an informed decision, it is essential that you approach this decision in a process-oriented manner.

For the average business, a mere 1% increase in price leads to a whopping 12.5% improvement in profitability. That’s the single most powerful lever a company has for boosting the bottom line. The pricing waterfall, a tool for identifying hidden costs and expenses, is one of the most effective ways of capturing that 1% – or more!

Netflix has been getting a lot of attention lately for its new pricing strategy. If you have kept an eye on the matter you will have noticed that there is an interesting paradox. Consumers hate it but analysts love it. They may lose as many as 2.5 million customers but profitability should go up.

Airlines are leaders at sophisticated pricing systems, developing micro segmentation and capturing profits. Despite being leaders airlines still have the opportunity to capture more profit with simple tweaks to their pricing model. Read more on our thoughts…

A consultant at Pricing Solutions recently presented some learnings he took away from an IBM conference on the topic of analytics. An important topic was the emerging frontier of using real time data to make real time decisions. From a pricing perspective, how could this level of data analytics move companies forward in their ability to be good value based pricers?

If your segmentation isn’t leading you into a discussion about behaviour, price structure, innovation and offer design, you probably have a large untapped opportunity. Read how segmentation can be the backbone of your pricing strategy.

Bon Jovi said “The only thing I like more than my wife is my money.” It’s rare that you find a rock star that likes his wife, but even more so to find one that that actually practices what they preach.

I have been watching the Stanley Cup Finals between Boston Bruins and Vancouver Canucks. One of the keys to Boston’s success has been the steady play of defenseman Tomas Kaberle. Kaberle was acquired from the Toronto Maple Leafs in February of this year.

Competitive pricing is one of the most thrilling and terrifying aspects of pricing – thrilling because it is a high-stakes game, and terrifying because you can get locked into a price war and end up swimming in a sea of red ink.

Kent had been excited about launching his company’s newest engine into the aviation industry. It offered major benefits, such as better mileage, greater durability and reduced maintenance costs. Unfortunately, sales were anemic, and Kent was forced to discount heavily to hit his target numbers.

After a busy month of travel to Europe and throughout the United States, on Saturday I learned of Aeroplan’s upcoming increase to the point requirements for a “free” flight.

We have created a Canadian Pharmaceutical Market Research Paper. For more information go here.

For many lost deals, price was not the factor; perceived quality was the driving force behind the decision. Collect customer feedback and use lessons learned to refocus your service-delivery model and win more deals.

This week I had the opportunity to attend the Pharma-Market Research Conference in Toronto. All the major players in the pharmaceutical manufacturing industry were present; Pfizer, Bayer, GSK, Roche etc.

Why was your airplane overbooked? How come the price for a hotel room changes from day to day and how do car-rental companies know how many cars to have at any given airport? These questions and more can be answered by looking at the management science tools used by some businesses to manage revenue, costs and capacity utilization.

With the recent launch of the iPad 2, much has been made about Apple’s decision to launch it at the same list price as the original iPad. Unfortunately most of what I have read has skirted what I see as the key pricing questions at the centre of this debate.

As commodity costs skyrocket, there has never been a greater need for companies to implement strategic price increases. Unfortunately, many organizations are afflicted with Price Increase Rigor Mortis (PIRM), an insidious disease that paralyzes their ability to raise prices and ravages their bottom line.

When I started working as a pricing consultant more than 20 years ago, I became really excited about the development of “conjoint analysis”, which is a method of measuring price elasticity.

If your company’s sales department is in charge of pricing, that’s like putting Dracula in charge of the blood bank!

If your client is sipping champagne when they paid for beer, it’s time to establish a pricing strategy.

Why on earth did they buy that there? Sometimes, it seems customers act irrationally when it comes to their buying behaviours. But that is never the case. Customers always behave in ways they perceive are in their own interest. And yet, the rationale behind these decisions is often puzzling.

Imagine you’re an executive at a chocolate company. For years, the company has relied on a promotion to sell one bar for 79¢, or two for 99¢. Demand for the promotion is huge, even though you charge tax on top of the 99¢.

Our article was recently displayed on The Pricing Advisor, which is the Professional Pricing Society’s Newsletter. You can find out how to avoid a price war here.

Your boss gives you a seemingly impossible task: Increase profits by 12.5%. How do you respond? Some managers might spend a great deal of time trying to persuade the boss to reduce her expectations. A more productive response would be to improve management of prices by just 1%.

Pricing Solutions will be hosting an event on the 17th of September exclusively for Pricing Managers to gather and exchange ideas as well as approaches to difficult pricing challenges.

Many commodity prices seem to be starting to inflate again. Wheat, in particular, has shot up over 25% (see The Economist August 7th 2010 pp94). Wheat is an important input into numerous food products and will likely impact process food prices at retail in the coming year.

You might have noticed by now that Amazon and E-book pricing have been part of the biggest pricing news of the past week. This article touches upon an interesting pricing model, which the author believes will not benefit the actual publishers that wanted to enforce it.

A curious note about Ford’s new pricing strategy on one of their models. As I understood it, they are cutting prices on a new 2011 model but offering a premium for an upgrade to a smaller motor with less power, but with the perk of being an EcoBoost engine. Interesting.

A new pricing strategy that allows buyers to dictate prices can lead to higher profits; if some of the proceeds go to charity. The strategy is called “pay what you want,” and has gained a foothold in several markets in the last few years.

I am currently reading the book “HARDBALL: are you playing to play or playing to win” by consulting heavy weights George Stalk and Rob Lachenauer. It is an interesting business strategy book with great case studies.

Jim Saunders recently wrote an interesting article published in the 2010 Journal of Professional Pricing from the Professional Pricing Society. The introduction sums it best.

We are proud to announce that Vinay Kanetkar was awarded “Best Presentation” at the 32nd INFORMS Marketing Science Conference held from June 17th to June 20th in Cologne, Germany.

I stayed at a hotel this week that I had heard about, but never stayed at. I can understand why I had heard good things about this hotel. It has a distinct value proposition. There is original art throughout the hotel. It is beautiful art and engaging.

I was speaking with an executive today whose company provides AI software applications. They recently developed one for pricing. Essentially, it crawls the web and provides information on the best prices in retail electronics. I took a look at the site and thought there were some compelling elements to it.

Last week, I had two pricing experiences that got me thinking about how to price. One was a scam that was effective. The other ended up feeling like a scam and was ineffective.

Welcome to our new and improved Pricing Solutions website. I look forward to sharing my thoughts on pricing strategy and pricing management with you on a regular basis in this space.