Three Pricing Predictions for 2018 (and How to Use Them to Your Advantage) | OpenView Labs

January 2018 already! Your inboxes are no doubt full of predictions for the New Year, so let me suggest why you should care about pricing predictions.

Pricing is where all the different aspects of your offering (be it product or service), your marketing plan, your sales process and your customer, converge. If you can’t agree on a price with a customer, well, then you do not have a customer.

Long a rather geeky sub discipline of marketing, changes in business models and technology have made pricing a locus of innovation. Pricing will be the critical marketing discipline over the next five years, and what was once the domain of experts is becoming of general interest. So how will pricing change in the coming year, and how will those changes impact your business? Here are three predictions.

1. The pace of commoditization will accelerate
Commoditization is often seen as a bad thing by pricing experts. We like to see lots of meaningful differentiation so that we can apply value-based pricing and win our clients’ higher revenues, or profits, or market share. One cannot apply value-based pricing to commoditized offers.

What does commoditization mean? Basically, that there is widespread understanding of an offer, how to deliver it, and market acceptance of the value proposition. It means that the innovation has been a success. Think of some typical commodities – electricity, audited financial statements, bank accounts, Internet access, dish soap. We all know what these are, how to buy them, and what to expect.

Commoditized markets take three forms. If you are in a commoditizing market (and you will be at some point) you need to understand which one your own company will fall into.

Read complete article here:

Three Pricing Predictions for 2018 (and How to Use Them to Your Advantage) | OpenView Labs.