What exactly is meant by price management?
The term price management refers to a very analytical and strategic task concerning the business model in the corresponding competitive environment. Once the company’s own positioning in the market with its strengths and weaknesses as well as the USPs (unique selling propositions) has been updated, the actual technical part begins. Price management is not rocket science, nothing completely new or innovative, but solid craftsmanship based on a wealth of experience.
Why is this instrument treated so stepmotherly?
First and foremost, in my experience, there is insecurity in dealing with prices. The fear of losing orders, turnover and customers to the competition prevails when dealing with price increases. These fears outweigh the great opportunities to increase profitability in steady, small steps over the years. Inflation is countered with cost-cutting programmes, possibly in order to lose customers through declining performance.
However, this concern is unfounded if management takes a detailed and up-to-date look at the market and customer needs. If possible, a price adjustment should be accompanied by additional services from which the majority of customers also derive added value.
Get expert advice – we have already implemented many pricing projects very successfully without losing relevant customers.