Insights & Tips

Already a subscriber? Login

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

Behind the Curve with Price Elasticity

A couple of weeks ago, a colleague brought to my attention an article in a business strategy publication about price elasticity in consumer-retail environments.

Now, consumer pricers have been using price elasticity for years, so that’s nothing new. But what I found maddening was how the author was advocating for something even more sophisticated than price elasticity metrics.

Think about that for a second….

As a group, we business-to-business pricers have only recently begun to recognize the predictive power inherent in price elasticity metrics. And while many of us have indeed moved quickly to leverage that inherent power, we have to acknowledge that most B2B pricers are still setting prices with little or no idea as to what’s going to happen as a result.

But in consumer environments? Price elasticity metrics are a given. The ability to predict impacts to volume, revenues, and profit? That’s table stakes. In fact, price elasticity metrics are so shopworn and pervasive in B2C that consumer pricing people are now calling for even more sophisticated approaches!

I don’t want get off on a Dennis Miller-style rant here, but there’s no reason B2B pricing has to be so far behind the curve (pardon the pun). Price elasticity in B2B exists. We can measure it. And finally, we can use those price elasticity metrics to set more profitable prices, with far less risk and uncertainty about the outcomes.

To better understand some of the fundamental concepts and principles involved, these PricingBrew Journal resources are a great place to start:

Of course, price elasticity metrics may never be as pervasive in business-to-business environments as they are in consumer settings. But we can definitely close the gap. Not because we give a rip what consumer pricing people are doing (we don’t), but because we can recognize a really good thing when we see it.

Get Immediate Access To Everything In The PricingBrew Journal

Related Resources

  • Business-to-Business Price Elasticity

    In this recorded training session, we explain the fundamentals of price elasticity in straightforward terms, explore the various principles involved, and provides valuable tips and insights to help you get started toward leveraging this most powerful measure in B2B pricing.

    View This Webinar
  • Exposing the Power of Price Elasticity in B2B

    Price elasticity is incredibly underutilized and often misunderstood. Barrett Thompson explains the nature of price elasticity in B2B and how you can use it to set better prices with far less risk.

    View This Interview
  • Building a Pricing Center of Excellence

    Experts have long argued that centralized pricing is the ideal model for driving performance improvement. But these days, companies are finding success taking a different approach---the Pricing Center of Excellence.

    View This Webinar
  • The Fundamentals of Value-Based Pricing

    Value-based pricing is like any other business practice in that most of the power comes from mastering the fundamentals. In this on-demand webinar, learn the core concepts and essential processes that generate the most bang for the buck.

    View This Webinar