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No Such Thing As Competitive Pricing Pressure?

A webinar for Journal subscribers called How to Combat Competitive Pricing Pressure turned out to be one of our most popular live sessions to-date. In this session, which is now available on-demand, we discussed 20 of the most effective strategies and tactics we’ve uncovered in our research.

As you might expect, many of the highlighted approaches were around managing the pressure that manifests in the field, or on a deal-by-deal basis. But some of the most powerful approaches were those designed to lessen the potential for significant pricing pressure to manifest in the first place.

While preparing for the session, it occurred to me that “competitive pricing pressure” is a major misnomer.

After all, are we getting calls from our competitors, complaining that our prices are too high? Are our salespeople freaking out about losing a valuable competitor if we don’t modify our volume schedules? Are our competitors threatening to “take their competition elsewhere” if we don’t match their prices?

Of course not…because all pricing pressure is driven by customers, not competitors.

When we forget this fact, we run the risk of taking the wrong actions for the wrong reasons. When we pay more attention to our competitors’ price moves than to our customers’ perceptions and preferences, we can find ourselves responding to pricing pressure that doesn’t really exist. We can find ourselves gutting our margins to match a competitor’s price reductions, without ever thinking about whether our customers have a clue what the other guy is doing, or whether they even care.

The point is that our competitors’ price moves should only matter to us when they matter to our customers. And customers, not competitors, should be the primary focus of our pricing efforts and actions. Competitors play a role, certainly. But we can never forget that it’s a secondary role.

    As always, your answers are confidential. Stay tuned for the results.


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