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  Precision Pricing
 
When it comes to the setting of prices, there are two opposing business beliefs:

The Traditional Approach   The Value Approach
1) Price is cost-based. VS Price is a function of product benefits and service advantage.
2) Price is market-dictated. VS Price levels should be based on many pieces of information (including customer attractiveness, cost, product/service/advantage, etc.).
3) Pricing is set by standard volume discounts. VS Pricing is all about managing transactions and expectations.
4) Higher prices risk loss of business. VS Customers want high value rather than low prices.

Stop leaving money on the table.
 
We all know that different customers place different values on your products. Yet, year after year, businesses fail to adequately analyze their pricing model. It is a discipline few put into practice.
 
Value analysis can show you what your customers perceive to be the value they receive compared to the price they pay for your product and for those of your competitors. This "value mapping" is a strong tool to determine current competitive positions and probable future market share changes. Hence, pricing decisions can be made based on perceived values, rather than from a cost base, margin requirement, what competition is charging approach. This new approach helps to avoid leaving money on the table.
 
Improving overall prices by a minimum of 1% generally leads to a better than an 8.6% increase in operating profits (each and every year), and an even greater improvement in annual cash flows.
 
Execute an in-depth "dive" into your transactions to see where "price leakages" are occurring and how they can be reduced. Often, you will recover your investigation costs even before you start to realize the benefits of operating in a Price / Value maximizing world.
 
The Precision Pricing Team at Beckett can help you. We welcome your contact.

View a brief Powerpoint Presentation on Precision Pricing


 

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