Many companies believe that they possess a deep understanding of their target prospects. People in these companies will say things like, “I know my customers. I talk to them every day.” Or, “We’ve got people who’ve worked in this industry for 20 years. We know our market inside and out.”
Yet, most of these companies still struggle to develop any sort of sustainable pricing power. Why? How can this be? After all, a company that really understands a prospect’s motivations, concerns, problems, frustrations, and processes clearly has the keys to reducing pricing pressures and creating pricing advantages, right?
The truth is, most B2B companies confuse closely-held beliefs and deeply-rooted assumptions for true understanding and insight.
Does 20 years of working in a particular industry really result in a deep understanding about the current problems and preferences of thousands—and possibly millions—of target prospects? Does talking to current customers every day in the course of taking an order or providing a quote really result in a deep understanding regarding the concerns and objections of the many prospects a company is not currently doing business with?
Of course, working in an industry for 20 years, or dealing with current customers every day, will produce many assumptions…but assumptions are not facts.
Simply put, when a company fails to employ any sort of meaningful research and discovery processes, they’re flying blind and operating on guesswork. And, strategic pricing decisions based on guesswork and assumptions aren’t really all that strategic, nor can they produce sustainable pricing advantages.
So, stop guessing. Stop assuming. Recognize that for strategic pricing to be truly “strategic” you have to take steps to learn the truth…even if those truths fly in the face of closely-held beliefs and deeply-rooted assumptions.