Pricing Strategy
Our experience in advising clients in various industries demonstrates that many organizations are ill-equipped to effectively conceive and deploy successful pricing strategies, resulting in over-reliance on efforts to cut costs or boost unit sales.
Despite its significant impact on business performance and profitability, pricing remains one the most under-utilized strategic levers in many companies' management toolkit. Our experience indicates that some of the common issues that act as roadblocks against effective pricing management include:
Art rather than science – Dependence on personal judgment and business experience in lieu of sound, fact-based pricing management methodologies
Cost-based and competition-oriented, rather than demand-driven – Lack of an in-depth understanding of customer behavior and price responsiveness to substantiate pricing decisions
Monolithic rather than targeted – Failure to adjust pricing strategies to fully leverage the different needs (and valuations) presented by distinct customer segments
Ad hoc rather than systematic – Absence of an ongoing pricing management process through which information is collected and analyzed, performance is monitored, and decisions are made
Diffuse rather than structured – Lack of clearly defined roles, responsibilities, processes and decision rules across key stakeholders, i.e. Sales, Marketing, Finance, and Product Management
Isolated rather than integrated – Decisions made within specific groups or business units are often misaligned with broader organizational objectives
Bridge adopts a customer-driven, demand-based approach to help companies develop and implement successful pricing initiatives that are not only strategically aligned with broader corporate objectives but also rooted in sound organizational support. As a result, Bridge is well-positioned to work with clients in various industries to address multiple strategic as well as tactical pricing issues, including:
- What new product features would provide me with the best returns for my R&D investments? How much would different customer segments pay for different or additional features?
- What service characteristics are worth investing in? How much more would customers pay for new services or enhanced service levels?
How to price “new-to-the-world” products?
How to best manage prices across different customer segments or across adjacent product categories?
How changes in prices of specific products could affect the rest of my portfolio? What specific pricing moves would maximize the profitability of my entire portfolio?
How should we react to specific pricing moves from key competitors?
How differently should prices be managed along the product lifecycle?
In which products, when, where and how would promotional pricing work more effectively? Should an everyday-low-price (EDLP) approach be adopted instead?
How can I realign my organization to enhance our pricing management capabilities?
