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Decision Guide for 2019 Pricing Strategy


“It is not about what you ask, but what you keep”: A Guide to 2019 Price Increases Planning and Communication are Key!


A strong domestic economy, tariffs, inflation, and an uncertain global economy make for complex decision factors for executives, product managers and even the salesforce. Here’s what’s on our minds: FACT: Vendor costs are certainly going to increase.
DECISION POINT: How much do I pass through? What incremental margins can I get next year? Which product lines are most likely to absorb the increase?

Our approach is straightforward:

Easy in concept. Harder to execute, right? Let’s break it down.

Know where your comparative strengths are and how they impact your decision making.Knowing how your brand and products compare to your competitors is the foundation for creating a robust pricing strategy.

If you don’t have real market analysis to fall back on, canvass your employees in a survey. Get some real talk from customers you trust. Internally, use the data you have—even if it is not perfect—to dissect how your price increases have translated over the last few years.

These simple approaches will get you started on what will become a tenable plan for 2019’s price changes. Once you’ve rationalized vendor cost changes and know your strengths, it’s time for the fun part!

Craft a plan for list price changes in 2019 and modifications to your discount structures. Begin the process with a simple scoring schema for your products (individual and by group) and customers (individual and by segment).

Grade highest those products and product groups that have the greatest market capabilities. Grade lower the products and groups that are mature or end-of-life. But watch out—don’t make the mistake of thinking you have a bunch of commodities. Make sure you consider the impact of your people, business model, and brand on your products’ pricing power.

Next, use that same scoring schema for your customers. Rank highest those individual customers and segments that shine in ease of doing business, growth, and relative profitability. Triage accordingly with other customers and segments.

There you have it! A List Price Strategy based on product and a Net Price Strategy based on customers. Now that you have the structure defined, it’s time to communicate it.

Create brand-powered communications supported by your data and qualitative findings.

First, create a “2019 Price Change” communication for your List Price increase. Make sure to take advantage of a Sales Weighted increase rather than a simple average.

Next, create a communication plan for each customer that will experience a material change to their discount structure. Use a customer scorecard to bring real data to these discussions. Changes will be much easier to pass through when you are open, honest, and clear about your process for making pricing decisions.

Go into 2019 with confidence

Pricing shouldn’t be done by your gut or by the books. A careful evaluation and analysis will give you the reliable information to make decisions and communicate those with confidence. Want to know more about approaching 2019 pricing decisions? We’re here to help.

Accurate. Verified. Trusted.

Pricing Cloud's pricing strategies and models impacting over $4 Billion in revenue and over $100 million in profits annually.