Pricing Consideration 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

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