Solve Your Pricing Risks By Knowing One Thing

price responseThink you know what factors really drive price in your business?  Chances are you’re wrong about which factors matter, and wrong about how much they matter.  No wonder every price change you make feels like a guessing game loaded with risk.  But pricing science cuts through the subjectivity and determines the exact market response to price changes.

Price response shouldn’t be a guessing game

Nobody makes a price change without regard to the potential volume impacts.  However, for most organizations, their impact analysis is nothing more than an educated guess about how volumes might change, having no scientific basis to support them.  And to make matters worse, they usually guess that all customers and all products will experience the same relative volume change given a similar price change, for all periods of time.  Nothing could be farther from the truth.

You can’t afford to keep getting it wrong

When a company lacks knowledge of the true price response in its market, its falls victim to several pricing mistakes.  Price increases get pushed out to broad swaths of the business, with sensitive segments react by taking their volume elsewhere and less sensitive segments could have taken a greater increase without complaint.  What about those price decreases that were meant to increase volumes?  In a few cases you may pick up additional units, but in many segments the decrease won’t generate any demand. You will end up selling the same units after all, just at a lower price and lower profitability.

You can know the effects of price changes with certainty

Leading B2B companies use Zilliant MarginMax to discover the true drivers behind the prices in their market and to calculate the precise volume change that will occur for any change to prices.  This price response is different for every selling circumstance — thousands of combinations of order, product and customer attributes — and is constantly changing over time.

Price response puts you in control

Knowing price response at the micro-segment level is the critical value needed to accurately predict the revenue and margin impacts of any price change, and to recommend the optimal price changes across your whole business.  Companies that take the scientific approach to calculating price response are now able to predict and control how price changes will impact P&L results.

 

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