Days 1 and 2 Pricing Strategy

Align Strategic Pricing With the Company's Goals and Objectives

Ensure alignment with overall pricing strategy across a diverse set of functions within the organization.

• Articulate your meaningful and sustainable advantage (MASDA) and identify your customer's compelling reason to buy
• Develop a value-based pricing mindset that promotes an 'outside-in' rather than an 'inside-out' approach that will shape your pricing strategies and tactics
• Evaluate your organization's pricing strategy development process
• Evaluate value-based pricing into an actionable cross-functional capability within your organization
• Design a structured and disciplined framework for a value-based pricing process
• Use the framework to ensure alignment between business and pricing strategy
• Select and target your most profitable customers
• Evaluate the competitive landscape by identifying and evaluating market opportunities, and limitations, that will shape your organization's future

Effective Customer Pricing Alignment Tools

Learn highly-effective and leading-edge pricing tools and techniques to evaluate and ensure alignment between different customer purchases and price.

• Use segmentation to characterize customers and gain insight into their purchasing behaviour and preferences
• Evaluate and optimize your strategic business units and product lines aligning with the goals and the objectives of the company
• Define customer segment by differentiating on value
• Use Net Price Analysis to pick your winners and losers
• Evaluate the discounting and incentive behaviour provided to different customers
• Identify the 'soft-dollars' contributing to profitability differences across customers
• Set price levels aligned to value received
• Establish price rules, metrics and price fences
• Define the pricing strategy desired, either skimming, neutral or penetration
• Use targeted discounting structures instead of across the board price reductions

Value-Based 'Outside-In' Pricing Tools and Techniques

Assess and evaluate a variety of pricing tools and frameworks that suit your organization.

• Simulation exercises - competing on price conducted over the Internet and using laptops
• Capture and measure the elasticity of demand for products and services relative to the competition
• Manage price and perceptions
• Develop the 'right' pricing and value approach to customers
• Measure your brand equity
• Quantify the value perceptions held about you and your competitive offerings
• Identify the value drivers that contribute to share growth and profitability
• Use competitive intelligence to anticipate customer and competitive responses to proposed offerings

Explore the Key Ingredients that Contribute to a Compelling Pricing Strategy

• Understand what customers truly value in a downturn
• Create 'fences' between product offerings
• Identify whether you are in a leadership or followership position
• Evaluate and price your competitive advantages
• Develop bundling strategies to avoid price transparency
• Offer special services for free

Implement significant decisions quickly and effectively and gain support throughout the organization

• Build in accountabilities across functions within the organization
• Identify key success factors and ensure measurement mechanisms are in place
• Communicate the price/value proposition
• Make the case to marketing, sales, operations and finance to ensure you get the resources you need
• Make correct channel and distribution partners
• Ensure a process is in place to account and clearly explain differences in pricing across similar customers
• Ensure policies and process are in support of each other
• Build a process to identify, approve and manage exceptions to pricing policy
• Ensure information systems provide the data needed to perform the required analysis

Day 3 Software and Tools

Effective Customer Pricing Techniques and Alignment Tools

Learn highly effective, leading edge pricing tools and techniques to evaluate and ensure alignment between customer purchases and price.

Price/Attribute Trades: How to build on what data you have and get what is needed.

• Historical Evaluation: How to test historical data, build a pricing database, and use normalized elasticity
• Competitive Intelligence: How to gather, clean, and verify competitor pricing
• Utilizing Firmograpics: A more effective approach to segmentation
• Voice of the Customer Initiatives: How to eliminate the word "Price" from your customer's lexicon?
• Building Virtual Markets: How can we starting pricing today?

A selection of tools that can be used at different stages in the pricing process

• Questionnaire building: How to find the answers you are looking for?
• Leading Software in Pricing: Strengths and weaknesses
• An Example: Effectively Building and Leveraging Virtual Markets

Value Based Pricing: Evolving Pricing, Expanding Markets, and Moving Beyond Your Competition

Learn why value based pricing evolves the marketplace beyond current limitations and build an understanding leading tools/techniques that have been industry tested.

Value Based Pricing: How to Move From Cost-Plus to Value Based Pricing.

• Identifying value drivers; How they contribute to growth and profitability
• Effectively moving your sales force from price to value driven
• Managing pricing and perceptions; Internally and externally
• Value Mapping; Correlating where you and your competition are in the marketplace
• Examples: Analytical tools and processes to evolve your pricing strategy

List Price Adjustment:

• A multifactor model, moving from a flat price increase to a continuous approach
• Utilizing value drivers and price point execution for margin expansion
• Effectively communicating the list adjustment: Internally and externally

New Product Introduction:

• Over 90% of launch prices are incorrect; How can we avoid this mistake?
• An in-depth analysis around value pricing new products
• How to utilize this technique for the product life cycle and portfolio alignment

CHAID and A Priori Algorithm:

• Building new segmentation from the learnings in module two and identifying value drivers
• Using these new nodes to capture a greater percentage of margin
• Chaining A priori analysis to CHAID nodes for new bundling and pricing opportunities

Tying Everything Together: Group Exercise

The scenario: Your company is introducing a new product to an existing portfolio in a competitive market place. "Your company developed a new revolutionary technology and held over 80% market share over the last 10 years. However, in the last three years some competition has moved into the space with a significantly cheaper version of the product. To combat these new competitors you are re-evaluating your product-line and introducing a new low cost platform."

In this scenario you and your team must:

• Identify value drivers relevant to the marketplace
• Evaluate your competition to build a value map
• Triangulate the value map and competitive analysis to price your new platform
• Re-evaluate your current product line and develop new price points
• Utilize the discount authority matrix to find switch-over price point