There have been any number of references to pricing power in the last few days, quoting the comments of both Seth Godin and Warren Buffet. They are both on target with the advantages such companies experience. However, they do not tell the whole story. Simply put, price power refers to the impact your pricing has [...]
There has been much press on rising commodity costs and talk of strong inflation. Recent cost trends, such as cotton hitting a 140 year high, raise the specter of a sustained period of inflation. Yet, many businesses still face a turbulent and uncertain operating environment. This is certainly true when it comes to operating costs. [...]
Many businesses are now at the busiest part of their annual planning cycle. Much like the past two years, they face a turbulent and uncertain operating environment. This is certainly true when it comes to operating costs. Traditionally, pricing has considered cost as an exogenous element, both in planning and execution. Pricing has incorporated this [...]
A few weeks ago, while attending a pricing conference, there was quite a bit of talk about pricing in advance of the recovery. Just a few short weeks later, housing starts have had the weakest showing in decades, durable goods have had the largest drop in almost 2 years, and the Dow is poised to [...]
To achieve the optimal sales compensation system, you must deploy a model that works well for you and your company. Compensation models can include components of both volume and price. Many models focus solely on revenue, some solely on gross margin. These are often sub-optimal. Here are a few quick ways to engineer your sales [...]
The success of any B2B pricing initiative depends in large part on the alignment, or linkage, between pricing policies and sales compensation. In our experience, when the sales force is compensated for volume and has discounting authority, volume tends to increase and margins tend to decline. It’s good for sales but too often bad for [...]
The first Annual ISA Product Show was an outstanding success. We were privileged to meet many interesting attendees and companies. By our count, there were close to over 200 distributor and 330 manufacturer representatives in attendance. While many participants have seen their sales start to stabilize over last year’s record lows, they spoke of ongoing operational challenges. [...]
Flexible pricing has often become the key to survival for many companies. However, they must now focus more on other considerations when formulating pricing strategies in this evolving economic climate: cost recovery, evaluating changing economic conditions, and targeting long term success. Price changes done in isolation may adversely affect product profitability and your financial stability [...]
Leaving Money on the Table Providing customers with better value and pricing to preserve volume as well as maintaining a steady cash flow during this recession is forcing companies to re-invent their sales process and re-visit their pricing strategies. Most firms are torn between lowering prices and leaving money on the table. The key question [...]
Simply put, price power refers to the impact your pricing has on customer demand relative to the competition. Historically, strong pricing power, or the ability to raise prices, was proportionally linked to the traditional marketing strengths of a company: brand, differentiation, quality, etc. In a relatively benign economic environment, industry value curves do not radically [...]
