Are you concerned that your international pricing is out of control, or that you are missing opportunities to optimize pricing for local competitive conditions?  Value and Pricing Partners can help you develop a more strategic approach for managing global pricing that increases revenues and margins by better balancing the price management needs for simplicity and common structure with the specificity required to optimize price performance in regional markets.  

The path to improved global pricing practices typically begins with segmentation.  If you are selling to global customers against a common set of competitors, then a global pricing strategy makes sense.  If you are selling into markets with local customers, having unique requirements with varying competitors, then strategic management of local pricing decisions is a better path forward.  In reality the best solution is likely a combination of serving the needs of these two broad segments of your business.

Beyond segmentation, some or all of the following elements may form part of a solution.

Price Performance Measurement.  Let’s say a solid portion of your business represents numerous unique markets around the globe.  Then a second part of the solution may be improved price performance measurement.  If you could quickly assess pricing performance of any local market, then you would make better daily decisions.  So a global price performance measurement system may be part of the solution.

Global Pricing Policies.  If a sizable segment of customers is large corporate clients who make global buying decisions, then a key part of the solution may be strengthening global policies, authority and controls around large account pricing, and enforcing implementation.  In this case, an important part of the price performance measurement would be monitoring pricing policy compliance.

Pricing Processes.  One of the characteristics of professional services pricing is that pricing authority and decision making tend of necessity to be widely dispersed.  In a global environment, that dispersion is compounded.  In this case, when value and pricing are largely determined at the point of sale, a key to improved control and performance is implementing common pricing processes.  For example, a global training initiative that includes sharing a common toolbox for profiling buyers’ willingness to pay, for estimating and communicating value, measuring price sensitivity, and tailoring proposals may be a good solution.  

Pricing Information Systems.  Achieving the desired level of price optimization may require you to provide field sales people with a pricing information management system to anchor the processes.  These systems not only provide real time value selling and pricing tools to field sales, they also make pricing processes more efficient, streamlining decision making and shortening sales cycle time.

Sales Compensation.  Finally, this summary would be remiss without a reference to sales compensation.  As a friend of mine at Penn State puts it, “Good sales people are coin operated.”  If, for example, the compensation system is structured to primarily maximize utilization, then price performance will be difficult to sustain.  It is simply not in sales best interests to hang tough on prices.  Highly successful pricing organizations reward sales by tying compensation either to margin or to performance relative to a price target.

For example cases, follow the link Global Price Management Cases.

To schedule a phone appointment to discuss your global pricing challenges, contact tim@valueandpricing.com