Management Questions

• Do we have a thorough understanding of our customers’ purchasing patterns and psychology, and of the drivers of decision making in our category?
• Have we embedded pricing discussions into the innovation and new-product launch process so that any opportunities to bundle or unbundle products, create all-in-one systems, or develop add-on products are identified early on?
• Do we have a clear view of how pricing may be used to reflect the economic cost of unused capacity – or to manage around capacity constraints?
• Is our customer relationship management (CRM) system sufficiently robust to allow for tracking, contacting and upselling to customers over time?
• How strong are our steering mechanisms for managing the sales force so that it can execute more nuanced, multistep pricing strategies?
• Do we have tools in place to measure our customers’ lifetime value and repurchase rates?
• Do we know where our price leaks are? Can we pinpoint the biggest factors (such as trade spending, discounts, upgrades, and commissions) driving the difference between list price and net realized price, so that we know where to focus price changes first for the greatest impact on margin?

Source: Just-in-Time Pricing by Gus Antorcha, Just Schürmann

For many companies, achieving social advantage will require fundamentally rethinking their social and business strategy. Executives who want to lead their organizations into this unfamiliar territory might begin by posing the following questions to their management teams:

• What are the social and ecological costs generated by our current business model?
• Who bears these costs and what are the likely consequences? How sustainable is our current business model?
• How structurally robust is the level of trust that we inspire in our employees, customers, suppliers, and regulators?
• To what degree are our company’s social contributions integrated into our core business mission and purpose?
• Where are the opportunities to renew critical resources or goodwill, to profitably meet the social expectations of our customers, and to address new social markets?
• What obstacles are impeding these opportunities and what traps could we fall into?
• Where can our company shape the industry ecosystem and gain social—and business—advantage?

Source: Social Advantage by Martin Reeves, Dieter Heuskel, Tom Lewis | Boston Consulting Group (BCG)