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Effective Pricing Strategies for Post-Recession

In the last 18 months, many B2B companies have foregone price increases or even reduced pricing in efforts to retain customers, maintain market share, and ride out the recession. Now that markets are returning to life and demand is on the rise, companies have begun to ask what their pricing strategies should be. While there is great sensitivity to the notion of price increases, these increases are indeed starting to occur – especially at the raw materials level – and they will only cascade through the supply chain. Many leaders think that their customers won’t accept an increase in price; experience tells us this often isn’t the case.

Effective pricing is a powerful tool. A 1% price increase can increase profits by 10% or more when sales are maintained. But developing and implementing a pricing strategy that will deliver positive results is a complex question that requires a solid understanding of customer needs and competitive offers; critical thinking and evaluation; and great communication.

In the last four months we have seen more companies evaluating their pricing strategies. Here are two questions they always ask before developing a new pricing strategy, and some of the tools they use to achieve new pricing:

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