Warren Buffet has identified "pricing power" as the most important factor is evaluating investment, but what does "pricing power" really mean, who has it, and how does it impact business performance?
Pricing thought leaders Andreas Hinterhuber and Stephan Liozu published an important article in the MIT Sloan Management Review "Is It Time to Rethink Your Pricing Strategy." (You will need to register with MIT Sloan to read the article but there is no charge for access.) The article is based on extensive research carried out over the past 18 months with CEOs and other senior executives on pricing practices at B2B companies.
In the article the authors introduce the Pricing Capability Grid.
Where does your company fall in this grid? The two key capabilities needed to achieve Pricing Power are Price Setting and Price Getting. To get the full benefit of pricing expertise, companies need to link the two together - Price Setting needs to be done in a way that makes sense for sales, who in turn have to be able to convey the value to the customer that underlies the price. Contact us at [email protected] to find out how the LeveragePoint cloud collaboration platform can help you get to the Pricing Power Zone.
