Systematically create unique added value together with your customers - strengthen your pricing power – boost sales and profit!
In a dynamic environment, many companies are faced with increasing cost and price pressure. Providers who offer unique added value in the eyes of their customers still manage to achieve above-average profits. They are successful, because they have 'pricing power' - their customers are prepared to pay higher prices and do not immediately switch providers when prices are increased.
Pricing power can be systematically built up through Strategic Value Selling. Strategic Value Selling goes beyond 'classic' Value Selling. Starting with a company's business model, it considers the entire marketing and value creation process that precedes the sales conversation. This creates a basis on which salespeople can build in order to develop unique solutions with measurable added value together with their customer contacts.
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Process / Results
Review and evolve your business model as the foundation of value and pricing power. Create and monetize measurable added value for clearly defined target groups. Position your company as an indispensable service provider for the customer who optimizes or takes over its processes.
Segment customers according to their needs and willingness to pay for added value. On this basis, develop segment-specific interaction and pricing models to serve different customer types efficiently and effectively and to increase customer satisfaction.
Develop customer-specific benefit bundles that create measurable added value for the customer and a unique position for the provider. Offer tiered solutions consisting of products, software and services. Use innovative pricing models (e.g. pay-per-use) to lower purchase barriers and create customer loyalty. Strengthen your brand and personal relationships as differentiators.
'Pricing power' is based on 'value power'. Therefore, first financially quantify and document the added value delivered to the customer (cost reduction, sales/profit increase, risk reduction) as the basis for price setting.
Ensure customer acceptance of the added value quantification. Base the price on the value delivered, instead of exclusively on your costs. Share the added value with the customer when setting prices (value sharing).
Support sales as the spearhead of value creation with tools (e.g. software-based profitability calculators) that help to steer customer discussions away from price and towards value. Incentivize salespeople based on margins instead of exclusively on turnover.
First convince your own sales force, then win the customer! Therefore, closely involve sales management and the sales force in the transformation project. Pilot Strategic Value Selling for selected products/markets. Then implement a successive roll-out.
