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Pricing & Profitability

As one of the four marketing Ps, Pricing is the most powerful lever a company has to boost profitability. According to a well referenced McKinsey & Company study, a 1% increase in price results in an 8% increase in profits for a typical S&P 1500 company.

Pricing & Profitability

In concert with Promotion, Placement, & Product - Pricing will largely determine how effectively you capture your products' value in the marketplace and ultimately the level of profitability your organization will achieve.

Just like almost any other operational improvement area of a business, Pricing should not be considered in isolation. At The Market Element, we help a client improve their profitability by applying a holistic view of their business that considers several important questions up front:

  1. What does the competitive market look like?
  2. Are products effectively addressing business needs?
  3. Are products/services appropriately priced to capture optimal value?
  4. Is the sales force properly equipped, incentivized, and selling based on value?
  5. Is customer satisfaction improving and are customers compelled to continue purchasing?
  6. Does the organization have the processes, people, and technology in place to proactively manage profit performance?

Our holistic approach guided by the Profit Intelligence® Value Realization Model, brings rigor to profitability improvement initiatives, and consists of a proven process that is used to walk clients through their business and uncover improvement opportunities in a systematic manner.

The Profit Intelligence® Value Realization Model

Profitability is impacted at every stage in the value realization process - from assessing the market potential of a product, all the way through capturing and acting on customer feedback, improving customer satisfaction, bolstering loyalty, and ultimately strengthening the business.

The Profit Intelligence® Value Realization Model

Each phase of the Value Realization Model is comprised of many activities required to successfully sell a product or service into the marketplace. Most companies exert effort in all phases of the model to some degree or another, however, what differentiates the most successful companies from their peers is the level of self-understanding within each phase and the whether or not they act on their understanding to take advantage of improvement opportunities. We have found that there are key areas within each of the five phases where most companies need assistance in order to achieve their full potential:

Full Realization Model

Every client is different and faces unique competitive challenges which is why it is essential to have a marketing partner who can quickly understand the specific issues and is flexible in working to remedy them. Not every company needs to have world-class capabilities across the spectrum, and we pride ourselves on the ability to quickly assess an organization for the areas of greatest opportunity to improve profitability.

Where Do I Start?

If you are like many of our clients you may suspect you have a pricing problem but dont really know where to start to understand the issues, let alone, correct them! No fear, we have a diagnostic that is used to assess the current capabilities, identify the gaps & opportunity areas, and plan for corrective action.

Where Do I Start?

Understand the Market

Knowing your market is a critical and foundational element for being able to execute on sales and organizational strategies. Without market knowledge companies are flying blind, and the risk of organizational failure increases immensely. Who are the major compeitors in our area? Who are the sleeper competitors that we need to closely watch? Who are our customers and are there different segments of customers with niche needs? We offer premier market research capabilities that will answer the most important questions about market competition, your current customer base, and what customer segments you should be targeting!

  • Voice of the Customer Feedback
  • Competitive Landscape Assessments
  • willingness-to-Pay Studies
  • Primary Market Research
Understand the Market

Develop Offerings

When it comes to your offering, you need to be sure that the products and services you sell into the marketplace meet the needs of your target customers. Companies should ideally sell customers solutions, not products or services - this even applies to commodity products - customers are paying for problem solving. Does the product contain features that help your customers solve a problem? What benefits do customers derrive from those features? What quantifiable value is driven from those benefits? Answers to these questions ultimately help one understand "What are customers willing to pay for our offering?" We offer tremendous primary research capabilities that will answer the most important questions about your products & services - providing a view of value from your customer's perspective!

  • Monetization Strategy Development
  • Feature-Benefit-Value Preferencing
  • Solution Bundling and Pricing
Develop Offerings

Interact with Customers

You need to be able to communicate effectively about how your offering solves specific problems and provides value to customers. Customers want to be cared for, nurtured, and feel like they have a partner in the supplier that they buy from. A big part of developing customer trust is to communicate transparently and simply about your products and services. We can help you generate captivating marketing content that not only will your target market love, but you potential customers will be searching for it - this is called 'pull marketing' or 'inbound marketing' and is an area of expertise of ours.

  • Relevent Content Development and Delivery
  • Effective Communication Channel Activation
  • Customer Offer & Discount Structuring
Interact with Customers

Sell Solutions

You understand your customers needs, you have developed a solution that meets those needs and solves problems, and you have communicated the value of this solution into the marketplace. Now you need specific value propositions prepared for your offerings so that your sales force can have effective customer conversations and quickly produce profitable quotes using accurate pricing information. Your sales team must have have the appropriate training and job-aids to facilitate an effective sales dialogue. We can help your organization develop the value proposition statements for your offerings and ensure that sales has the information needed to engage in valuable converations with potential customers and ultimately close the deal.

  • Customer Value Proposition Development
  • Sales Incentive Structure Alignment
  • Solution & Value Sales Training
Sell Solutions

Strengthen the Business

Your team made the sale, time for a brief celebration to aknowledge success! However, the work is really just begining. You need to keep your customer's happy and retain them through nurturing and structuring effective loyalty programs. You also need to be able to stay ahead of your customer's needs as well as your competition by leveraging powerful insights that are currently locked inside your troves of data. Insights gained from examining the tens-of-thousands of existing data points including: historical sales transactions, customer purchasing patterns, competitive pricing intelligence, product profiability metrics, and many others, will allow your organiztion to know if you are making progress towards achieving your organization's strategic goals, and more importantly, course-correct if needed. We can help you set up an efficient analytics capability that will make heads and tails out of your Big Data and provide you with even bigger insights!

  • Loyalty Program Development
  • Customer Satisfaction Measurement
  • Post-Sale Analysis & Offering Refinement
Strengthen the Business

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