Pricing: Defining the Right Strategy

Key points to consider

1. Move responsibility to strategic function
Think of pricing as central to your long-term strategic plans; not as part of your short-term, tactical actions. When reassigning responsibility for pricing, ask yourself: how does the pricing reinforce the brand value of your product or service? How do prices affect supply and demand? And, ultimately, how does your pricing strategy help to drive profit for your company?

2. Retailers are in the driver’s seat
Manufacturers must acknowledge that retailers are in prime position to understand and determine pricing strategies. Their ability to capture and analyze transaction and loyalty-card data gives them the insight needed to define the prices and promotions that drive the most profit. Online retailers are also able to optimize prices using sophisticated algorithms that consider multiple variables that manufacturers may not be able to see. It’s essential for manufacturers to work closely with their retailer partners to develop promotions that are mutually beneficial.

3. Consider the role of value
Do you know what value consumers place on your brand, and why? Once you do, you can explore how value can be protected and enhanced by your pricing strategy. Understanding how consumers define the value of your product or service brings you much closer to identifying a pricing strategy that works.

4. Big data is still king
Making use of the wealth of customer data available is crucial for shaping your pricing strategy. Use it to gain insights into price performance and identify which segments of consumers are willing to pay more for your products and services.

Source: KPMG 


Channels that Influence Customer's Consideration

  • Visual Discovery Platforms: The product consideration phase typically starts here. Consumers are going to visual discovery sites to get ideas and inspiration for products they need and want to purchase. 
Buying Stage: Awareness
What Channels to Use: Instagram, Pinterest, Google Image Search + Product Listing Ads, Display & Magazine/Outdoor Ads, TV, etc
  • Thought Leader Bloggers & Industry Influencers: Thought leaders and industry influencers are people who affect others and may write on blogs or have big followings on other social platforms. Consumers trust their opinions. 
Buying Stage: Awareness - Education
What Channels to Use: Co-Authorship/Guest Posting, Sponsored Product Infomercial, "Celebrity" Sponsorship, etc
  • Forum Communities and Groups: Some of the most active communities online are industry specific forums, communities and groups. They resonate especially well around subject matter experts and groups with shared interest or life stages. 
Buying Stage: Education - Consideration
What Channels to Use: Industry Forums, Quora, Yahoo Answers, etc
  • Peers on Social Network Platforms: Customers seeking out a product or service providers, typically ask their network or friends. Consumers typically look into their trusted inner circle and peers for advice, feedback, and recommendations. Social media platforms allow customers to further research and follow trusted influencers to get that additional insight. 
Buying Stage: Consideration - Validation
What Channels to Use: Facebook, LinkedIn, Twitter, Podcast, YouTube, etc
  • Consumer Testimonials & Reviews: Companies and products are at the mercy of customers reviews and it took a long time for companies to accept the power switch. Having some negative reviews humanize your brand as long as you responding to negative reviews in a proactive and polite manner. 
Buying Stage: Validation - Closing Decision
What Channels to Use: Publishing your Customer Testimonials/Reviews, Aggregated Customer Review solutions, Product Review Websites & Videos, etc
  • Direct Communication on Website: Opening the lines of communication with your customer at the right time can be the difference between a sale or a shopping abandonment. When your customer is on your website and idle for a long time on a conversion page or aimlessly bouncing between pages, they can't find an answer to their question and getting frustrated. Opening a live chat window or offering a customer service/sales phone number can significantly improve the customer to get over the line. 
Buying Stage: Closing Decision
What Channels to Use: FAQs, Your Blog Articles, Inbound Calls, Live Chat, etc

Source: Marketo