Pricing Strategy Insights & Research | GTM Pricing Innovations

Every so often, those of us responsible for setting and defining the pricing of our offers hear our sales team advocating for discounts in order to win a deal.

If this behaviour is persistent within our organization, it can be an indicator of a deep underlying problem. Our sales team is blocked on positioning value.

Our salespeople are not equipped to position, communicate and quantify our differentiated value. As a result, they lack the confidence to present and justify our pricing. No salesperson would willingly want to leave money on the table, would they?

Pricing is one of the key metrics that drive the value of our businesses. Everything from the lifetime value of customers (LTV to LTC), to annual recurring revenue (ARR), and profitability relies on price. As we know, price depends on value.

Other customer-facing functions such as marketing, customer success, also need a clear understanding of how our business is providing value to our stakeholders. See how Customer journey maps are a key tool to inform and shape value.

Economic Value Estimation™, EVE™, developed by Tom Nagle, is another tool that is used by marketing, sales, and pricing professionals to quantify and communicate value. EVE focuses on the economic value relative to the next best competitive alternative. The economic value is analyzed in terms of its component parts (positive and negative value drivers). Economic value drivers are organized around the six ways companies can deliver economic value:

Increase revenues

Decrease costs

Reduce operating capital requirements

Reduce capital investment

Reduce risk

Increase options

Read more about the role of EVE™ and the connection between value and pricing models. Other tools such as ROI calculators can act as proxies to position value but are less powerful as they do not get to the core elements that are really creating our differentiated value.

In my last series of posts, I detailed elements of the strategic choice cascade for pricing. Systems play an important role in supporting our value cycle and they allow us to gain efficiencies as we execute on our pricing strategy and implement our pricing model. We rely on systems to standardize our processes, collect and analyze data, to get insights.

To be successful in fostering a true value culture, we need to prepare our sales team with the systems that can help them demonstrate and stand by the value we deliver. By leveraging the quantitative and qualitative data from customers, as well as competitive, and internal sales data, we have the ingredients to segment our customers by the value they perceive, need, and want. Furthermore, we are able to measure this value to position and justify the prices we set.

Stay tuned for our announcement on how we can help unblock sales to confidently position value and associated pricing. Foster a value-based culture throughout your organization where your customer-facing teams are well prepared to communicate the value you deliver, document the value that is delivered, and have the confidence to optimize value capture in a fair, consistent, and transparent way.

Strategic Alignment is Critical to Pricing Outcomes - Use a Strategic Choice Cascade to Frame Pricing Decisions

Winning Aspirations - What pricing goals are we trying to achieve

Where to Play - Making Pricing Choices to Define your Market

How to Win - Portfolio and Pricing Choices are Well Matched

Capabilities - Skill Around the Value Cycle

Systems in the Strategic Choice Cascade - Tools and applications used to across the value cycle

Value-based pricing 2.0 goes beyond ringing the sales bell

What is your target value ratio?

The Value Pricing Dashboard will be where you integrate applications across the customer journey

A value model will change your business

The customer journey is your guide to pricing communication

Accelerate business growth with Ibbaka’s Value Pricing Dashboard