I’ve been reviewing a bunch of deals in a client’s CRM system. There’s a disturbing pattern, as we start approaching the end of the month, all of a sudden the target close dates start getting pushed out. Deals we expected to close this month slip into the next month. As I review the deal histories, I see the same pattern, month after month of slippage. I looked at one deal, the target close date had shifted 11 times in the past 6 months!
One day, when you’re looking up a customer’s account to review their last few purchase orders, you notice that their order volume has been slowly declining over the past six months. They’ve also dropped some of the add-on products they used to buy from you every month. Could this be the start of a customer retention problem?
When you consider the time and effort that goes into setting your pricing — and the risks of getting it wrong — it makes sense to do everything possible to start with optimal pricing. Setting a price that’s too high or too low has real consequences. If your price is too high, you don’t sell as many products as you projected, or your margin suffers. Customers may still be willing to purchase the product, and it may fit a need, but it doesn’t have the value you originally thought. This leads to heavy discounting.
While reportedly the single biggest lever for driving profitability and economic value for most companies, pricing remains a distant fourth in the race for attention amongst the 4 Ps in marketing and business strategy.
No matter what kind of company you work for, customer satisfaction is important. This is especially true in the airline industry where consumers have more choices than ever, and customer experience can make or break your reputation. Airlines take customer satisfaction seriously.
Pricing is complex in most industries today, but nowhere are the stakes higher than the food and beverage industry. Price affects competitive position, influences the number of units to be sold and is a critical factor in exceeding your company’s financial metric: revenue and profitability.
In order to use price optimization to generate more sales revenue, you must understand the customer’s willingness to pay. But it’s not easy to use pricing excellence when you’re pricing complex configurable products. There are two basic categories to consider when you’re talking about a configured product: Made-to-order products, and bundles and bills of materials.
If your sales reps have to wait a long time for proposal approval before they’re clear to deliver a quote to a customer, you’re at an extreme competitive disadvantage.