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Pricing Strategy

How would you answer the following questions about your pricing?

• Do you price to cost or to value?
• Do you discount your prices over 25% of the time to get the work?
• Is your pricing strategy "whatever the customer will pay"?
• When was the last time you conducted a complete review of your prices?
• Have you ever calculated how much money your product saves your customers or how much it impacts your customers' profits?
• Do your prices allow you to make a profit on new products?
• Are prices and/or pricing procedures and policies adhered to?
• Do you know your costs well enough to establish a profitable price?

Pricing Strategy is ...

About competitive strategy and using price to establish competitive advantage. It's all about profitability. Set your prices too low to start and you never make money. Smarter pricing strategy asks what your products and services are worth to each customer and how you can communicate that value. Price is strategic as well as tactical. Knowing the real value of your products, and being able to communicate it, gives you a powerful weapon against customers who always want to beat you up on price.

Benefits of Proper Pricing Strategy

• Increases profitability
• Creates closer link between price paid and value received
• Builds stronger customer relationships
• Energizes your people by instilling confidence in products' value
• Reduces management headaches by focusing on what customers really value

How can Phase 3 help me implement a smarter Pricing Strategy?

We help you evaluate your current pricing strategies and policies, starting with cost behavior. We help you determine fixed and variable costs of each product and service to assess the "inherent" profitability of each. We help you discover the real value of your product by helping you see how customers use your product as well as those of your competitors. We work with you to review your current pricing strategies and recommend changes to improve position and profits.