Wrong pricing strategies are often a reason for reduced profit margins. An internal study by a manufacturing concern revealed that for long their sales staff were incentivized to sell newer models, so they would get away by quoting the minimum price possible. B2B firms especially are hit hard through such margin adjustments. A study was conducted by Bain and Company to understand what makes certain companies the pricing leaders. Three aspects were best understood that gave them an edge. One such practice is the incentives on offer for sales staff is geared towards prudent pricing. Best returns are assured on customer and product levels. The salesforce is also equipped with the most up-to-date tools for using business analytics and their data-driven approach. Pricing around the mean is always a dangerous trend. There must be adequate corporate training provided to sales personnel towards following the right pricing strategy. Forums also exist where they may further discuss any such on-the-job issues.

Source:http://www.bain.com/publications/articles/is-pricing-killing-your-profits.aspx

Uploaded Date:18 July 2018