In pricing, it’s easy for us to get bogged down in the small things we have to do today, but it’s important not to lose sight of the bigger picture.
Our employers pay us to use our skills and knowledge to improve the profitability of the company. Of course, we should be using our tools and abilities to find the best possible prices for our products and services. But we can also use those same tools and abilities to address the bigger picture. Here are five things you could be doing to make a larger impact on your company’s profitability (as well as links to PricingBrew resources that explain how to accomplish them):
- Identifying customers that are defecting before you lose them. Compared with B2C firms, B2B companies tend to have smaller addressable markets and much larger deals. That means losing just one customer can be a really big problem. Fortunately, if you spot a potential customer defection early, you have an 80 to 90 percent chance of winning them back. This video session explains how to use your analytics tools to identify the three most common types of customer defection.
- Stave off the bad deals before they happen. Don’t waste your time pointing fingers at salespeople who make bad deals. Instead, put on your private investigator hat and figure out why outlying deals went so badly. Once you’ve identified the true root cause, you can suggest measures that can prevent similar deals from taking place in the future.
- Maximize the value you’re getting from existing customers. Do you know which are your most profitable customers? More importantly, do you know which customers could be more profitable for your company with just a small amount of work? If the answer is no, check out this video session. It explains how to set up a profitability segmentation model so that you can see at a glance which of your current customers offer opportunities to increase your net income.
- Shift your customer mix to more profitable customers. If your company is simply taking customers as they come, you’re probably not making as much as you could be. In any business, certain customers are more profitable than others, but few B2B organizations take the time to run the numbers and see which types of companies they should be targeting. Running a fairly simple report could allow you to give guidance to the sales and marketing teams that makes a dramatic impact on the bottom line.
- Help ensure your company’s marketing efforts aren’t hurting your margins. As a pricing professional, you may or may not be part of your company’s marketing department. Even if you’re not technically in marketing, you need to be working really closely with the marcom team because the messages that they put out will have a direct impact on the prices you are able to charge. This guide will help you avoid five of the most common marketing mistakes that can affect pricing.
This sort of big-picture thinking isn’t only good for your company, in many cases, it can also be good for your career. If you have larger ambitions, activities like these are a great way to demonstrate that you understand the business as well as you understand pricing.
Identifying Three Types of Customer Defection
This video guide shows how to identify the early signs of three costly types of customer defection and how to take action before it's too late to turn it around.
Preventing Bad Deals Before They Happen
Thanks to analytical toolsets, it's easy to identify deals that weren't priced properly. But after-the-fact corrective actions do little to prevent outliers from happening again. This diagnostic shows you how to uncover and address the true root causes behind bad deals.
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.
Manage Your Customer Mix to Improve Profits
It's natural to assume that you need to raise your prices or lower your costs to improve gross margins. But there's another powerful variable in the equation that can help grow profits.