PricingBrew

Insights & Tips

Already a subscriber? Login

Become a subscriber and unlock an information arsenal focused on making your pricing efforts more effective.

Bad Pricing Is Reality…Deal with It

In the online training session, How to Price New Products, we discussed strategies and considerations around three types of new products that most pricing teams will have to handle at some point. Specifically, we discussed:

  • Incremental Improvements—The pricing of “new and improved” versions or revisions of existing products or services.
  • Purpose-Priced Products—Introducing products that are specifically-designed to fill a strategic pricing need in the portfolio.
  • New from the Ground Up—Pricing products that are entirely new to the company and potentially innovative in the market.

We spent quite a bit of time discussing the “New from the Ground Up”-type of product. But not in the ways you might expect. You see, we’ve found that very often, pricing teams find themselves having to clean up others’ messes.

In reality, while the product team might invest 18-24 months in actually developing a new product, the pricing team may not be involved until 45-60 days before introduction.

Sometimes the product will be thrown “over the cube wall” along with some basic pricing levels and discounting schedules, developed with very little knowledge of pricing. In other cases, little or no consideration has been given to pricing in the development phase, and the pricing plan must be built from scratch at the last minute.

But in either case, the pricing team often finds themselves in the position of having to quickly figure out what’s missing, what needs to be improved or refined, what needs to be developed out of whole cloth, and so on. They don’t have the luxury of doing everything “right” from the very beginning. They have to work with what they have, diagnose the problems and gaps, and make the best of a bad situation.

Because if they don’t, the product introduction may not generate the financial performance everyone is expecting. And as we all know, pricing is the easiest thing to blame when the expected results don’t materialize in the marketplace.

In short, until the necessary changes in mindsets and processes are affected upstream, pricing teams have little choice but to equip themselves with the knowledge and tools to deal with the situation as it presents itself and play “the fixer.”

No, it’s not ideal or “best practice.” And yes, it’s extremely frustrating and inefficient.

But more often than not, it’s reality…so we have to deal with it.

Get Immediate Access To Everything In The PricingBrew Journal

Related Resources

  • Avoiding Guesswork in Value-Based Pricing

    Most value-based pricing initiatives aren't small undertakings--and shouldn't be left to trial and intuition. This guide outlines a proven research process that can get you started.

    View This Guide
  • Survival Strategies for Raising Prices

    In this on-demand training seminar, learn why some B2B companies struggle with price increases while others are able to do it with far less pain and angst. What are leading companies doing differently to execute price increases with far less risk, conflict, and uncertainty?

    View This Webinar
  • The Multiple Dimensions of Value Chart

    Use this chart of potential value-drivers along multiple dimensions to aid your initial brainstorming around how your offerings deliver value to your customers.

    View This Tool
  • Making Change Happen

    How do you get executives to recognize a need for change? How do you get an organization to move away from the status quo and actually embrace doing things differently? How do you foster true adoption, as opposed to merely forced compliance?

    View This Webinar