Are you pricing on value? | Issue #219
How to accelerate your business growth through value-based pricing
Do you charge all your customers the same price? Be honest here. And did you reach that price by looking at your costs-in and adding a healthy margin? This form of cost-based pricing is pretty common. We find it in most businesses when we start coaching them, particularly when they sell commodities.
But by doing this, you’re missing a trick. Credit must go to Blair Enns for his book ‘Pricing Creativity: A Guide to Profit Beyond the Billable Hour.’ In it, he articulates a view beautifully that I have held for some time. If you want to scale your business quickly, you need to charge based on the value your company represents to customers rather than cost.
‘That’s all very well,’ you may say. ‘But how?’ Let me give you some suggestions.
How To Better Prepare To Combat Inflation, with Hermann Simon
Inflation is back and here to stay. For companies, this ‘new normal’ means that the world in which they do business has fundamentally changed. Their main priority is to discover and apply new strategies to ensure their survival.
Hermann Simon is a renowned speaker, founder and honorary chairman of the world’s number-one pricing consultancy, Simon-Kucher & Partners. His impressive background and expertise in strategy and marketing make him one of the world’s most influential management thinkers and an invaluable source of knowledge on globalization, profit orientation, corporate strategy, world market leadership and pricing.
This week, he joined us for a new episode of The Melting Pot to share some insights into his new book, Beating Inflation. This guide is a solution to the current economic downturn, exacerbated by the global pandemic and the war between Ukraine and Russia. We talked about increasing costs and pricing, how often companies should increase their prices, so they don’t put too much strain on their clients and how to prepare their sales teams to combat inflation.
A conversation you don’t want to miss. Download and listen today.
Talking About Organizations is a conversational podcast where they talk about one book, journal article or idea per episode and try to understand it, its purpose and its impact. Collectively tackling managerial and organizational problems, you get the full benefit of active and organic thinking as opposed to passive receiving that normally accompanies a monologue or a lecture.
When managers fail to have frequent, meaningful conversations about their progress, it leaves employees wondering how they’re doing. They miss important opportunities to celebrate successes, adjust priorities and provide the support needed to help employees succeed.
In acquisitions, there are two types of leverage. The first is negotiating leverage, which determines who wins on deal-breaker points. The second is knowledge leverage, predicated on knowing what issues you can win on without jeopardizing the deal. There’s little you can do to change your negotiating leverage — you either have a competitive acquisition process or you don’t. However, you can change your knowledge leverage. Contrary to what the acquirer might say, most points are not deal breakers. You just need to know what to ask for — you might be surprised at how much the acquirer will agree to, but only if you ask.
We often think of burnout as an individual problem, solvable with simple-fix techniques like “learning to say no”, more yoga, better breathing, practicing resilience. Yet, evidence is mounting that personal, band-aid solutions are not enough to combat an epic and rapidly evolving workplace phenomenon. In fact, they might be harming, not helping the battle. With “burnout” now officially recognized by the World Health Organization, the responsibility for managing it has shifted away from employees and toward employers.
Is unabated inflation the new normal? Inflation is back and here to stay. For companies, this means that the world in which they do business has fundamentally changed. This book examines inflation from multiple perspectives and offers actions and strategies for companies to cope with and manage it to ensure their survival. For businesses and consumers, it is not a question of eliminating inflation, but how to cope with it in order to suffer as little damage as possible. This includes not just price management, but also sales, finance, purchasing, cost management along with digitalization and innovation activities in equal measure. It also requires corporate cultural change, which if managed fast and successfully, the prospects of defeating inflation and thus ensuring the survival of the company are good.
Quote of the week
“Your customers are the judge, jury and executioner of your value proposition. They will be merciless if you don’t find it!”Alexander Osterwalder
Dominic offers business coaching and management development, strategy planning and organisational change, using tried and tested methods to launch your organisation onto an unparalleled growth trajectory. His programme is a function of his broad experience, his deep expertise and a proven process used by over 2,700 firms worldwide.