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More Pricing Power through Value Power

04.09.2025

Suppliers of supposedly “interchangeable” products such as C-parts (screws, nuts, office supplies, etc.) are under particular price and cost pressure. To remain competitive, they have two options: they are either better or cheaper than their competitors. Companies who focus on being ‘cheaper’ quickly find themselves in a price war they cannot win. Suppliers who focus on being ‘better’ face a variety of opportunities to create added value beyond the product. Ultimately, the customer always decides what added value is. In the B2B environment, suppliers provide added value, e.g., by reducing their customers´ Total Cost of Ownership. If they do this better than their competitors, they have Value Power. And Value Power is the basis of Pricing Power: Customers recognize the added value, are willing to pay higher prices, and react less strongly to price increases. How can you find opportunities to create added value (differentiation), especially when you offer ´interchangeable´ products? Answer: By changing the perspective: The focus is then no longer on your product, but on the customer's ecosystem. The key question is: How can we help our customers measurably increase their business success?

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Boost your Pricing Power with Strategic Value Selling

19.03.2024

In a dynamic environment, many companies are faced with increasing cost and price pressure. However, companies which offer unique added value in their customers´ eyes still manage to achieve above-average profits. They are successful, because they have 'pricing power' - their customers are prepared to pay higher prices and don´t immediately change providers when prices are increased. Pricing power can be systematically built 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. Thus, the company creates a basis on which the salesperson can build to develop unique solutions with measurable added value together with their customer partners. Strategic Value Selling comprises the following core steps Continuously evolve your business model as a foundation for value creation A company's business model is the foundation of its pricing power. A business model describes how value is created and monetized for defined target groups. The Swiss medium-sized company Bossard has continuously evolved its business model: From a supplier of 'interchangeable' C-parts, the company has transformed itself into an 'indispensable' service provider that optimizes its customers' processes. This measurably reduces their 'total cost of ownership'. Based on the resulting savings, Bossard implements value-based pricing.

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Value-oriented Selling and Pricing of Industrial Goods and Services

08.09.2021

Is your company facing increasing price pressure? Then you are in good company: In a survey by the German Engineering Federation (VDMA), around 70 percent of machine builders cited growing price competition as a major future challenge (Commerzbank: Industry Report 'Mechanical Engineering in Germany', April 2021). What can be done about it? Basically, there are two strategic options: Either you try to survive on the market with lower prices than the competition or you offer innovative solutions with substantial added value. A low-price strategy always carries the risk that competitors will enter the market with even lower-priced offers and start a price war in which everyone loses in the end. Not every customer is prepared to pay for added value. It is therefore useful to segment customers based on their needs and willingness to pay. As a rule, two groups of customers emerge here: buyers who tend to purchase on the basis of value and who want a close personal relationship with the supplier, and customers who buy exclusively on the basis of price.

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Using Scenarios to develop successful Future Strategies

15.10.2020

Do you have a plan for the future – a strategy which will keep your company still relevant 5 years from now? Admittedly, it is difficult, if not impossible, to make plans in a turbulent environment. Short-term survival is the first priority. But managing a business without a strategy is like flying blind without instruments: Upcoming dangers are not recognized in time and the imminent crash is pre-programmed!

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Building value-added partnerships through Co-Creation

20.10.2019

Customer loyalty is high on the corporate agenda: Loyal customers buy bigger quantities, they buy more frequently and they recommend a company to others. This leads to recurring business and boosts financial success. Often, customer retention is unilaterally initiated by suppliers and it seems that they profit more from the relationship than their customers. However, a well functioning, long-term relationship is based on the same rules as a good partnership in private life: There must be trust and the relationship has to be considered fair. In a business context, fairness means that the resulting added value for both parties is financially quantified and equitably shared. Customers should not feel ´locked-in´ by a relationship, with only a small chance to escape, because they technologically or contractually depend on a supplier. Rather, both parties should aim to build a long-term partnership where they jointly create value.

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Value Power Strategy

Create unique added value with your customers – strengthen your pricing power – boost sales and profit!

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