Do List Prices Matter? If you want a broad lever for your business, then yes, they do …

The Pricing Factory @ GTDC EMEA 2016 - Cropped 355x288It is the only quick and simple across-the-board price lever, and so it is also one of the only quick and simple across-the-board business levers. By the way, if an across-the board list price move isn’t quick and simple, that’s something you need to fix asap. Here are a few applications:

List prices are particularly useful to mitigate adverse X-rate movements, for example a 4.5% increase across the board due to weakening of the pound, euro, Aussie $, whatever. It can be applied quickly with a clear rationale and justification to Sales, the channel and customers. It can also be combined with some product specific exceptions on specific items or categories which customers are either more list price sensitive to and/or require competitive adjustment. This type of price move combination will also check to see if your competition is on the ball by analyzing their response – or even the lack of it.

It is also useful as a lever to use in conjunction with a change in channel discounts. For instance, a reduction in channel discounts may be combined with a list price reduction to ensure that channel buy prices are the same or have some slight across-the-board decrease. This would mitigate the impact on the channel. There is no other way to do this in a subtle and refined way.

You should be able to use your “average-weighted list price premium” as a broad lever to drive your business as well. Make sure that not just each product is price positioned where you want them to be, but also that at an aggregated level – by product line, product group and total level – your pricing is competitively set. And you should know where those premium levels are for gaining share, holding share, losing share and shedding share. And if you’re a channel partner, shouldn’t you know what those price levels are for each of your vendors? And even if you don’t know, does your vendor?

Now tell me again, list prices don’t matter ……

More to follow!

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