OnDemand WTP Pricing Research

Your Peanut Butter Pricing Could Use Some Jelly | Modern Distribution Management

As a distributor, you know that pricing habits are hard to break. Often, your team develops what they consider to be a fair price for product categories, and then they just habitually give that same price to everyone.

They spread that ‘peanut butter pricing’ to all customers without really thinking about it. It’s easy, its fair (in their minds), and they are busy. Plus, it saves time to just price all the order lines with the same margin or discount level.

So, what can you do to help break the habit and make a better profit sandwich? How do you add some jelly (or bananas, if you are an Elvis Presley fan) to build a more profitable business?

Here are three ways to help you build a better pricing strategy:

1. Get organized feedback from your sales associates.

To work on breaking pricing habits, you have to understand why your teammates price the way they do. Developing regular surveys that ask for your associates’ feedback is critical.

You need to get measurable numbers to understand how often your associates feel they need to change prices, how they react to a customer asking for a lower price, and how competitive they think your pricing is in the market.

There are 10-12 key questions to ask your team to get the feedback you need. If you understand why they feel they have to discount, you can craft a strategy to respond. At our upcoming MDM Analytics Summit, as part of our pre-conference seminar, we will be helping attendees to build their own pricing survey.  It requires some thought and discipline, but creating a regular feedback loop can lead you to potential improvement programs.

After you develop your survey and analyze the results, it’s time to look at your transaction data and look for your team’s pricing habits.

Read complete article here:

Your Peanut Butter Pricing Could Use Some Jelly | 2018-07-24 | Modern Distribution Management.