Legendary Detroit baseball commentator Ernie Harwell once described a rookie player as having “experience no bigger than the lump in his throat as he begins fulfillment of his dream.”
Starting out in your pricing career might not be quite as exciting—or intimidating—as your first at-bat in the major leagues, but rookie pricers do have to deal with pressure to perform despite having very little experience.
And that combination of pressure and inexperience makes them very susceptible to rookie mistakes.
We’ve noticed that newbie pricing practitioners tend to make the same sorts of blunders: they frequently ignore critical pricing concepts. They take their eye off the ball, so to speak.
These folks with less experience tend to forget about three concepts in particular:
1. Price segmentation — In any B2B market, some customers are willing to pay a lot more for products than others are. Having an accurate segmentation model is crucial for extracting maximum value from B2B customers. The webinar The Fundamentals of Price Segmentation explores this concept in more depth and walks new pricers through the process of creating a segmentation model one step at a time.
2. Customer lifetime value — Unlike most B2C markets, most B2B markets are defined, that is, they have a limited number of potential customers. Those customers may buy very frequently, but there aren’t new customers coming into the market very often. That makes customer retention extremely important. The guide Avoiding Mistakes in Customer Profitability Management examines LTV and related ideas in detail and offers tips for avoiding common pitfalls.
3. Differential value — When customers evaluate prices, they do so in relation to their other options. Their perceived value of your offering as it compares to other products or services determines whether they think your price is too high, too low, or just right. So in order to set prices, you need to understand your differential value, and the tutorial Exposing Your Differential Value Step-by-Step walks you through the process of determining how customers view what you have to offer.
If rookie pricing practitioners can master these three concepts, they are well on their way to a successful career.
But of course, this is only a start. Pricing all-stars have to master a wide range of skills, some of which we explain in the webinar Crucial B2B Pricing Concepts. It looks at six fundamental ideas that every pricing pro needs to understand thoroughly. It’s a great place for new practitioners to start their education in the pricing discipline. And while we can’t guarantee that you won’t ever make any errors after watching, it can give your skills and confidence a boost that can help eliminate some of those all-too-common rookie mistakes.
Crucial B2B Pricing Concepts
Pricing in a B2B environment is very different from pricing in consumer or retail settings. In this on-demand webinar, you'll learn about 12 ways B2B pricing is unique and 6 core pricing concepts that every B2B pricing person needs to understand inside and out.
The Fundamentals of Price Segmentation
In this recorded training seminar, we explain the concept of price segmentation and why it's such a powerful and important tool. We explore the essential process and even walk through a step-by-step exercise, building an example price segmentation model from scratch.
Avoiding Mistakes in Customer Profitability Management
For most B2B companies, it's important to maximize the value of every customer you get. But customer profitability management is full of land mines that need to be avoided.