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The Good (Bad) News About Pricing Pressure

We asked the PricingBrew audience to tell us about the pricing pressure they’ve been experiencing in their businesses. Here’s how the results have broken out:

Pricing Pressure Pulse Poll Chart

All things considered—the unstable global economy, the unpredictable political climate, massive fluctuations in energy and input costs, just to name a few—it’s not too surprising that most B2B pricing groups (63%) are reporting that pricing pressure has been on the rise. And while many (31%) are reporting little change, only a very small slice of respondents (6%) are actually reporting a decrease.

Oh, to be in that 6%! Wouldn’t that be fantastic? If we’re in the “More Than Usual” morass, it’s hard not to be envious of those residing in the “Less Than Usual” utopia. Everyone should strive to be a Six Percenter, right?

Well…let’s think about that for a minute…

Let’s say you’re pushing the boundaries of your value proposition in the marketplace. Let’s say you’ve got a tight fist wrapped around your price segments and volume schedules. Let’s say that you expect discounts to be earned through behavior and not words…or even threats. Let’s say you’re doing everything you need to do to protect your margins and maximize your revenues and profits.

Think you might experience some pushback? Some…oh, I don’t know…pricing pressure?

In a sense, increasing pricing pressure might actually be a sign that you’re on the right track and pushing hard to do the right things. Conversely, decreasing pricing pressure might be sign that you’re leaving big money on the table!

Now, I know for a fact that some of the Six Percenters in our poll are indeed doing all of the right things. And as a result, they are finding it easier to win the business they want to win, at the prices they deserve to command. I also know for a fact that many in 63% are doing all of the right things. And as a result, they’re experiencing more pricing pressure.

The point is that reduced pricing pressure isn’t really the goal. After all, you can achieve that by just lowering your prices to the point where no one but your shareholders has a reason to complain.

No, the real goal is to do the right things and do them well. Sometimes, doing all the right things will have the added benefit of reducing the amount of pricing pressure you experience.  But sometimes…precisely because you’re doing all the right things…you will actually experience more pricing pressure.

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