How to set Profit-Maximising Prices
What you will learn
Appreciate the dangers of pricing on a cost-plus basis
Describe the elements in customer value
Deploy the Customer Value Grid to compare the value provided by their organisation’s products and services with competitors
Understand the eight-step pricing strategy
Prepare an action plan to assess profit-maximising pricing points for their organisation’s products and services
Consider appropriate pricing strategies for their organisation’s products and services
Develop plans to maintain and improve the customer value that their organisation offers
Description
Taking a strategic and structured approach to pricing is probably the single most important thing you can do to improve the profitability of your business.
In many organisations, pricing is seen as a dark art, but it is not, it is a science. The price you achieve for your products and services will be the price of the best alternative plus the differentiation value you create and effectively communicate to potential buyers.
To maximise profits, therefore, you need to identify those elements of your products and services that appeal to the customer and work to enhance them, eliminating any negative factors. Creating such differentiation value in your products and services, and requires understanding of Value Drivers versus the competition This course will show you how.
In this course we describe a method for setting prices for your products and services that maximise your profitability by aligning precisely with the markets you are targeting.
In essence the method is to ask yourself why customers would want to use your business rather than another? Then you compare your offering with those of competitors in the marketplace and pitch your pricing to show the value of the benefits that you offer customers – whether it be quality or service or speed of response and so on.
The topics covered in the course include:
· The dangers of cost-plus pricing
· What is customer value?
· The elements of customer value
· Measuring customer value
· The eight-step pricing strategy
· Practical Pricing Strategies
· Maintaining your Pricing Policy
The course is aimed at small and medium sized enterprises, but the key elements and tools can be applied to organisations of all sizes. The course is suitable for all levels and requires no marketing or finance knowledge.
I hope this course will inspire you to examine your own organisation’s prices and prepare a plan to improve profitability by building customer value.
(Course photo by Maarten van de Heuval on Unsplash)
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