A structured and disciplined approach to addressing competitive pricing actions maximizes value while minimizing downside impact.
- [Narrator] Competition is a necessary evil,…because as you know your entire industry is better off…with a vibrant, growing, and competitive marketplace.…But in B2B pricing competitors create problems for you.…Why?…Because they want the same piece…of business that you're after.…So, here's how to manage pricing actions…by your competitors.…Let's assume your competitor cuts their prices below yours.…Start by analyzing the impact.…
It's tempting to rush right in and match…or even undercut them, but hold on.…Your best response may be to do nothing at all.…Remember, price is a signal of value.…So you want to use this competitive pricing response…to send the right message.…When you analyze the impact, first estimate…the potential loss in sales.…Try to understand which specific customers you may lose…and why.…Once you understand the potential loss in sales…translate that into how much profit margin you're losing.…
That number is critical because you don't want…to take a pricing action that will cost you more than that…
Drew explains how to think about price when it comes to B2B business transactions-and understand the important relationship between cost, price, and value. He also shows how to define value, identify stakeholders, and link pricing to your overall marketing strategy. Plus, learn to use tools such as the value ladder and pricing tiers to gain leverage in price negotiations.
- What is B2B pricing?
- Defining value
- Linking marketing and pricing
- Creating pricing tiers
- Managing pricing competition