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Use Pricing Strategies for Maximizing Revenue and Profit

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Best Price

Companies take a number of different approaches to establishing their pricing , but many wrongly assume that they have limited control on revenue and margin by using more effective pricing strategies. Businesses can implement different pricing strategies and tactics to maximize revenue and margin. Depending on the pricing models and business-specific circumstances, it may take some time to find the right balance. The key strategy is to enable your front-line sales team with the tools and insights needed to maintain optimal pricing.

Here are some tactics you might consider.

 

1. Segment Around Buyer Values to Drive Value Pricing

If you’re struggling to get a grip on your customers’ buyer values, you aren’t alone. Buyer values can fluctuate based on the market competition, market sensitivity to pricing, and other challenges. For companies that serve diversified markets, a one-size-fits-all approach can leave revenue opportunities untapped. Segmentation around buyer business impact and value offers the flexibility to manage pricing differently across different segments, adjusting for those markets where the underlying business value justifies premium pricing. When managed effectively, segmentation strategies can produce margin increases of 10 points, and sometimes more.

2. Pricing Decision Support

Sales representatives have a significant influence on revenue margin. In many cases, sales professionals might be pursuing volume over margin, and with poor pricing tools at their disposal, they likely give away revenue margin needlessly when adjustments to their discounting and other pricing actions might give them better guidance. Getting this right leads to improved margins for the sales reps as well as the business. Companies should be on the lookout for tools and resources that can help sales reps handle these pricing considerations.

3. Allocate Resources Towards Higher Margin Opportunities

Profit is always welcome of course, but some sales efforts will prove to be much more profitable to a company than others. Those marginally profitable segments may be turning over a net gain, but their consumption of resources could be taking away from other opportunities that offer greater pricing power and are even more profitable. Businesses should stratify their various segments by profitability and allocate resources to the most attractive segments.

4. Assess and Adapt

With these strategies in place, use observation and analysis to evaluate the success of new pricing strategies. By closely observing the effects, you will gain insights into what’s impacting revenue and margin performance and you can fine tune your strategies.

Ultimately, the market will be the main driver in determining pricing, yet leaders are recognizing the importance of using value-based segmentation, market research and decision support to inform and enable their pricing strategies.  Contact us if you need help in maximizing pricing impact.

 

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Social Monitoring Tools? Try Before Buy

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We are in the midst of selecting a social monitoring and engagement platform for one of our client’s social programs. The client is starting from scratch to establish an effective social presence, build a following and engage their audience. They have the opportunity to be a content leader in their market.

We won’t even scratch the surface on the full analysis in this post, but the headline is: Chose carefully, test first and don’t lock in. There are a lot of changes in this space including acquisitions and consolidations and different tools are likely going to be needed for different purposes – from engagement to sentiment analysis and influencer tracking.

We know that the client will need a solid social monitoring and engagement platform over time and there are new entrants every day to join early platforms like Radian6. We have taken a look at Sysomos, Spredfast, Radian6, HootSuite, CoTweet, and Traackr among a few others. Amazingly, we are getting very poor results with some of the tools where our search terms are not returning meaningful results. Some of the tools are far better suited for broad-based brand listening rather than focused subject influence.

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2011 Top Ten List for Revenue Growth

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We had fun this year with our holiday greeting and we offered a top 10 list of resolutions. Why not share it with the blog reading audience.

We hope you can be:

  1. Visible… Get to the top of search results page with your content and SEO strategy.
  2. Present… Extend your brand beyond your website with social media outposts.
  3. Approachable… Build relationships by being authentic in your online dialog.
  4. Focused… Identify your strongest niche markets and tailor your value proposition.
  5. Nurturing… Help your prospects remember you and understand your value.
  6. Synchronized… Develop a revenue attack plan that aligns marketing and sales teams.
  7. Automated… Use marketing and sales technology to free up time for new ideas.
  8. Relevant… Provide the content that your customers value.
  9. Tenacious… Follow-up on your leads and manage your account relationships deeply.
  10. Engaging… Make your story more entertaining with video, mobile and multi-media.

Some might say- “OK, but I already have these items on my wish list… how do I get them all done?” To that I would ask whether they have a plan in place.

  • Have you clarified your strategy?
  • Is everyone on board – including both marketing and sales?
  • Have you prioritized and considered the dependencies (people, skills, process, technology)?
  • Can you place initiatives into a timeline and a release plan (must, could, should)?
  • Do you have the right team and skills to execute?
  • Do you know the budget required?
  • Is the ROI clear?

If you can’t answer these, it is worth a little time to get organized – it will save you in the long run. Most every client we work with is on a continuous path to maturity around each of these areas and the bar keeps moving. Just when you think you have your content marketing plan in place with relevant articles and blog posts, you realize digital video is more important to reach audience and communicate message.

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