The business economy has taken a major blow recently, leaving B2B companies struggling with profitability. Lowering costs is one option to improve the bottom line, but pricing action can often be more effective. To maximize profits, companies should follow a lean process improvement model, consider outsourcing, and understand the key sources of volume.
To strategically raise prices, companies need to understand customer needs, consider unique pricing models, redefine the product, and communicate value. It's also important to implement price increases with a cross-functional team, adjust prices line-by-line, and provide product and service options. Additionally, signaling upcoming price increases to important customers can be beneficial.
At the core of a successful pricing strategy is segmentation, based on a solid understanding of customers’ performance needs, purchasing process, and criteria. Additionally, pricing should be based on the value the product provides and communication of that value to the customer. By taking a calculated approach to pricing, B2B companies can improve their bottom line and maintain profitability.
Company Profits Squeezed? Here's How B2Bs Can Justify Raising Prices
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