CEO Wavelength
Getting Your Company’s Pricing Strategy – Just Right.
Does it matter, getting your Company’s pricing strategy – just right?
More than you might think. In fact, it’s table stakes for small to mid-sized businesses. Some companies flip from double-digit negative EBITDA to several positive points within a couple quarters, by managing their costs and pricing their in-demand product or service, just right. It’s transformative, to say the least.
How do companies approach a pricing strategy?
You need to know your market, your market value and your costs. And, pricing strategies evolve over time. For example, a start-up might do margin plus cost and then, with the help of some finance expertise, shift to value pricing as they scale. Your market shapes your pricing strategy. The type of products and services in demand, today, and into the future, shape your pricing strategy. Market demand (how much your product or service is in demand) always matters and so does delivering product (or service) excellence. Knowing your place in the market also matters: Are you a leader in what your company delivers? Are you known and trusted for what you deliver? These answers will shape your pricing strategy. These questions too, about market competition, also help evaluate and improve a Company pricing strategy: Is your market over-saturated with providers of a certain product or service and are these providers awesome at what they do? If there’s a “No” for an answer to either of these questions, you’ve got an advantage to leverage and, double-that if you answer no to both of these questions.
Who is best to drive the Company’s pricing strategy?
Your finance expert with your company leadership, hands-down. Before this little tariff war, a pricing strategy might not have even been a part of your company’s leadership efforts. It definitely is now and longer-term, it should be as part of tying together an understanding of your company’s trajectory in shaping the market place. Invest in the right finance expert who can learn quick your company’s core business and transform your financial trajectory
When is the right time to tackle a pricing strategy?
There’s no better time than now to check if your pricing strategy is, just right. Your Company’s investments including, your People strategy, rely on a good pricing strategy. And, your Company’s bottom line will thank you for it- especially, today.
