Recently, I sat down with Tim Geyer, managing director of North America at MARKT-PILOT, and Kim Long from Syncron to dive deeply into market-based pricing. We highlighted hot-button topics like aligning pricing with the market, leveraging technology for pricing optimization, and utilizing market data to make informed pricing decisions.
Here are the top five things you will learn more about if you tune into the session recording.
1. Market-based pricing is crucial in the current landscape
The availability of numerous options for end users and the presence of third-party competitors necessitate that original equipment manufacturers (OEMs), and dealers align their pricing with the market. Failing to do so can negatively impact price image and customer relationships.
Getting started can be a manageable process. Long suggests looking at your business holistically and determining where market-based pricing may be most effective.
“The first part of market-based pricing is to understand which areas of a business it makes sense for,” says Long. “If you don’t narrow that down, the task is overwhelming. Consider where you have competitive markets and customers have multiple choices to purchase something. If you have something more commercial or commoditized, it does make sense to do market-based pricing. It is important to first look at your products and decide where to apply these tactics.”
2. Market-based pricing is vital for e-commerce strategies
With online platforms facilitating easy price comparisons, it is crucial for businesses transitioning online to ensure their pricing aligns with the market. Setting incorrect initial prices can lead to deterring customers or pricing certain parts inaccurately.
3. The buying process in the digital age allows for price adjustments
Customers are more open to accepting price adjustments when they understand the market realities behind them. Leveraging prevailing economic conditions, recognition of branding, and incorporating data-driven decision-making can instill confidence in customers regarding the rationale behind pricing adjustments.
“If you can go to your customers and say, ‘historically, we have been underpriced for this part by 30%, and we looked at the market analysis and decided we needed to raise our price, but we are still very competitive and in-line with the market’—that’s something that customers understand,” says Geyer. “It also helps when you can go back to a customer and say, ‘We have reduced our prices by 20% on this other part you have ordered in the past, based on market-based pricing.'”
4. Technology-driven pricing changes produce a fast ROI
Utilizing pricing solutions available through platforms like Syncron can lead to immediate value realization by consolidating pricing data, improving efficiency, enhancing visibility, and enabling optimization and smoothing of price curves. Both Syncron and MARKT-PILOT help customers realize substantial ROI within the first six months of implementing pricing changes.
5. Market data can improve pricing strategy
Exploring available market data can help improve pricing strategies by providing insights into competitive pricing, identifying quick wins, and enabling businesses to be bold and adjust their pricing approach.
To gain even deeper knowledge on market based pricing from experts in the field, access the LinkedIn Live recording here.