Working with marketing it is sometimes easy to overlook pricing as a key element in the marketing mix. Considering the fact that, according to ”The power of pricing” by McKinsey, a 1% increase in price statistically bumps profit by a whopping 8%, we need to rethink.
We lift price by direct price increases and negotiations with customers, promoting the lifecycle cost or efficiency advantage our solutions offer. But, what do we do long-term to increase the customers’ willingness to pay a premium? We build our brand.
By investing in high quality creative communication, we increase the perceived value of the offering. By building the brand through emotions we increase the preference for our brand before the facts are evaluated. By daring to stay with proven communication concepts we build quality and trust, combining it with newsworthy content within the concept build innovation value. By making our communications so interesting that it is widely shared to increase the perceived thought leadership.
Mind the gaps. All components of your organization build or retracts the brand, marketing, service, customer support, drivers, sales engineers as well as marketing, products and services. By clear, creative and consistent communication, displaying thought leadership, innovation and customer focus are obvious ways that drive brand, but difficult to achieve.
Then sharpen marketing and communications by truly understanding what stimulates your customers’ willingness to pay a premium – your brand potential. One client was certain “Price”, “Quality” and “Delivery Accuracy” were the most sales driving factors in the steel business. After doing a brand potential study the discovered the most sales-driving arguments was “Easy-to-do-business-with”, “Community” and “Prestige” – the type of arguments we traditionally don’t connect with B2B. By adapting communication both the customers willingness to pay and willingness to buy increased substantially.
How do you work to utilize the power of pricing?
- Do you want to know the most sales-driving arguments for B2B companies? Take 5 minutes to read this post.