Prices With Staying Power: The Sticky Situation You Want to Be In
Price increases have a significant impact on your bottom line, but how do you make them stick? Follow these 5 steps to sticky and profitable price increases. Read the full post here: http://thekinigroup.com/blog/sticky-price-increases/
Published on: Mar 4, 2016
Transcripts - Prices With Staying Power: The Sticky Situation You Want to Be In
The Sticky Situation
You Want to Be In
Annual price planning processes
usually focus on finding the perfect
price for every product.
…all of that effort goes to waste if
you can’t make your prices stick.
Many price increases get whittled
down through negotiations and
discounts given to customers.
A 1% price increase
can result in an
11% profit increase.
You need to make those
price increases stick!
Here are 5 steps to get you there.
1. Tie Price Increases
to Value Creation
Tie price increases directly to a
product or service value.
Optimize this strategy by working
on increasing value months before
a price increase goes into effect,
not at the same time.
Document and communicate how
your company creates value.
Use this as support for
the price increase.
2. Build Realistic Price
Many companies set price increase
goals just because they expect a
price increase every year.
This builds unrealistic expectations,
which creates an environment in which
price increases are expected to fail.
Setting reasonable expectations
breeds confidence and a culture of
On the other hand...
and Product Lines
Many companies use a
“peanut butter” approach, which applies
the same price increase to all customers
It rarely works.
Careful price increase planning is done
It takes more effort but
pays off in the long run.
4. Measure and Analyze
Regularly and Often
just implement price increases
and then try to connect the dots
when they fail months later.
Yes, measuring the impact of
price increases is hard.
It requires looking at actual price
But you can’t afford to skip this step.
It’s crucial to the success
of your price increases.
5. Provide Incentives
to Motivate Your
Successful price increases depend on
your sales team and how well they
convince customers to pay more.
If you only incentivize sales reps on:
volume, revenue, or margin,
they will focus only on these objectives.
Instead, include your updated pricing strategy
as part of their incentives.
Then they’ll commit to sticky prices.
Need a better way to plan your
annual price increases and
regularly analyze their success?
Start Planning Your Sticky
Price Increases Today
KiniMetrix helps companies:
1. Identify the target customers for price changes
2. Measure price performance
3. Create successful incentive programs
Click here to see how KiniMetrix
can do this for you.
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