Making international #channel pricing work: @PaulCharlton of #pricingfactory presenting at #GTDCEMEA16. There was a great question from Howard Davies of @Contextworld at the GTDC meeting in EMEA in June: Do list prices matter? I’ve heard this question lots of times before, and I’m sure Howard asked me because he’s heard it even more times than I have. Here’s the answer I gave Howard:
You need to work backwards from the objective you are trying to achieve. What businesses typically want and need are – not any particular pricing strategy – but consistent and predictable business outcomes. No matter how much growth in revenue/margin/risk reduction you can achieve, what your investors will value above all else is consistency and predictability. So Pricing needs to help businesses be consistent and predictable (bottom right-hand box): I’ve not come across any business leader who has objected to this approach … somehow all the discussions about particular pricing strategies disappear when I put this on the table.
And so working back from that, if you want consistent and predictable outcomes you need to have consistent and predictable discounts/discounting (middle-center box). No-one gets consistent and predictable outcomes is they have inconsistent and unpredictable discounts, do they?
And working back from that, the only way to get consistent and predictable discounts/discounting is to have consistent and predictable list prices (top left-hand box).
Yup. List prices do matter because what you want to do is build a sustainable and repeatable process/system which is designed to produce the consistent and predictable outcomes you want.
This is the answer I gave to Howard but there are other ways of looking at this. More to follow.
Thank you Howard! Great question!
