Protecting your price
May 8, 2007 § Leave a comment
No, I’m not talking about consumers locking in the lowest price. This is about you resisting the gravitational pull of commodification by taking proactive steps to protect the price of the goods and services you produce.
Pricing is an important part of the marketing process and one that most companies do not take lightly. Price is the result of thoughtful examination of cost, value, profitability and a range of market factors such as consumer perception and competition. Yet all too often price is the first casualty when the feet hit the street. When faced with competitive pressure or the ever-anxiety inducing RFP process it is tempting to make price carry the entire burden of winning the sale, and out comes the scissors looking to snip profitability to the bone.
The fact is price should be the last factor deployed in winning your sale. Instead of sacrificing price at the first bump in the sales road we should be building up the defenses, fortifying the position, protecting price with every tool in our arsenal. By separating price from cost we can communicate an appreciation for the value of a product or service. The more clearly we can dollarize that value in terms of TCO the stronger defense we build for our price. Further, strength of brand, perceptions of quality and luxury, and other characteristics such as ease of use, durability and suitability to a task, can all help in the fight to protect your price.
Global competition, cut-throat marketplaces, and ever more savvy consumers are just some of the factors conspiring in an endless assault on your price. But that attack on your price is also a longterm attack on your quality, your R&D, your profitability, your brand and value, and ultimately your business. So what have you done today to protect your price?