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A Crash Course in Price Segmentation

For B2B pricing practitioners, creating a workable pricing segmentation model is one of the most critical—if not the most critical—steps in the pricing process. If you don’t know how to do pricing segmentation or if you don’t know how to tell if you have a good model or not, you really won’t be able to create an effective pricing strategy for your company.

In addition, segmentation is also one of the more challenging aspects of being a pricing practitioner. Because no two companies have exactly the same product offerings, no two companies will have exactly the same segmentation models, and no one can tell you exactly how your segmentation model should look. There’s really an art to setting up a good model, and the best models are constantly evolving as pricing practitioners fine-tune their segmentation based on new data, experience, and changing market conditions.

Because this skill is so essential, we here at PricingBrew have created quite a few resources dedicated to the topic. If you’re new to pricing segmentation, we recommend starting at the top of the list below and working your way through each resource. If you’re a little more experienced but in need of a refresher, we recommend picking two or three that seem the most applicable to your situation:

  • The Fundamentals of Price Segmentation. You can think of this webinar as our Price Segmentation 101 course, an introduction to the topic. It provides all the general information you need before going on to more advanced material. It explains the fundamental terms and walks you through the process of creating a segmentation model step-by-step.
  • Avoiding the Pitfalls of Price Segmentation in B2B. There are a few errors that a lot of pricing practitioners make when setting up their segmentation models. In this recorded interview, Barrett Thompson, the general manager of pricing excellence solutions at Zilliant, goes over some of these common mistakes. He explains how to tell if you have a good model (or not) and what you can do to improve a model that has some shortcomings.
  • 21 Questions About Your Price Segmentation. Want to see how good your current pricing segmentation is? This self-assessment asks about the objectives and intent in creating your model, the quality and accuracy of your model, the granularity and specificity of your model, and the delivery and adoption of your model. If you answer the questions honestly and objectively, you’ll come out with a report card that shows how you’re doing and where you have room for improvement.
  • Getting the Most Out of Price Segmentation. Once you understand the fundamentals of price segmentation, you need to understand how to put that segmentation into practice. This intermediate-level webinar looks at best practices in B2B pricing segmentation and offers tips for improving your processes. If you’re ready to take your pricing segmentation to the next level, this webinar can help you get there.
  • Avoiding Three Costly Price Segmentation Mistakes. When creating your segmentation model, you not only need to know what to do, you also need to know what not to do. This journal article covers the three biggest mistakes you could make. Before you start using a new model, it’s a good idea to review these common traps and make sure you aren’t inadvertently falling into them.
  • How to Explain Price Segmentation to Others. Once you’ve wrapped your own head around the concept of pricing segmentation, you’re going to need to explain it to other people in your organization. Many executives, sales team members and marketers have little experience with the discipline of pricing, so you’ll need to explain the concept in terms they can understand. This article provides an example and even lets you download the visual aids you’ll need to convince the rest of your organization about the value of a good pricing segmentation model.


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