Last week, we hosted a panel discussion with our new partners from Implity Consulting, Stefan Ekström and Åke Wallbäck, on the theme “Developing a Pricing Strategy that Withstands Change.” We were delighted to have insightful contributions from behavioural scientist and psychologist Niklas Laninge, COO Anna Stiwne from Svevik Industri, and our very own Ulf Avrin, Managing Director EU at Pearson Ham Group.

Some key reflections from the discussion:

The right price is understood through customer behaviour

To be able to set the right price – the figure where the customer and the company meet, we need to understand which parameters are weighed into the purchase decision and upon which parameters we have made the decision. Do our customers choose us because we are the cheapest, fastest, deliver the highest quality? It is almost always a trade-off.

Data/insight

The only way we can understand how the customer behaves is through data – and continuous analysis of it. To understand and be able to collect information about customer behaviour, systems and tools are needed. We also need to understand which customers we make the most money from and in what way.

Pricing work should preferably begin before problems arise

Many do not see the need to work with pricing until they lose sales or margins. But pricing is something you should work with continuously. You do that with Sales and Product Development, so why not with Pricing? When customers fail in their pricing and margins and volumes decline as result the way back can be unnecessarily long. Getting analysis and data into the pricing work even when everything is going well is essential and invaluable. Insight is the only thing that allows you to make strategic decisions.

Everyone’s responsibility is no one’s responsibility

In many organisations, especially small and medium-sized ones, there is no dedicated pricing person. This means that the issue of pricing easily falls between chairs or land too far out in the organization. Not infrequently on the sales force. But pricing should be a management issue and requires cross-functional work – so that the price is defined with all parameters of value, brand position and win rates (just to mention a few) taken into account.

Many thanks to everyone who participated!