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Use the 80/20 Rule to Manage Pricing Exceptions


It’s a common knee-jerk reaction for salespeople to focus on increasing volume by offering discounts on every sale – even if it means sacrificing margins. One way to mitigate the risk of excessive discounting is to establish a pricing system that balances volume incentives with well-defined boundaries that sales staff must operate within.

Ideally, in an effective pricing system, the framework should provide guidance for as many as 80 percent of sales. This guidance should consider a comprehensive range of factors, including the type and size of the customer, the market and the nature of the opportunity. The direction should be clear and unequivocal, providing sales staff with “guardrails” that establish minimum and maximum prices or margins. Sales staff can bounce between these guardrails as appropriate, but they should not be allowed to go above or below the established boundaries.

Grow Your Wallet Share…Grow Your Business


You’ve most likely seen the commercials asking consumers, “What’s in your wallet?” Yet, from a business perspective, finding out what you have in your wallet isn’t nearly as important as finding out what you’re missing. That missing link is known as wallet share; and understanding what’s NOT in your wallet can lead to tremendous opportunities in terms of your business’ ability to generate profitable growth.

Use These Negotiation Tactics When Presenting a Price Increase [INFOGRAPHIC]

As mentioned in a recent blog post, getting your organization ready for raw material inflation includes preparing your sales team for price increase conversations with customers. It’s a skill that needs practice and developing backup strategies in case of pushback is a key component to your sales training plan.

Need help? You can use our Negotiation Tactics Infographic as a starting point.

Are You Ready for Raw Material Inflation?

The Federal Open Market Committee released their most recent inflation forecast for 2017 and beyond. And while inflation remains historically low, it’s also on the rise, with 1.9% projected in 2017 and 2% for 2018. We have already seen raw material inflation edging up the costs of metal, rubber and other industrial commodities. To quote a recent Bloomberg article, these prices have been “on a tear” since the second half of 2016.

When you run a business, talk of inflation typically translates into fear and angst. Here’s how we suggest you prepare for what’s coming…

Improve your Quoting Process...and Win Rate!

Getting to the "right" price for your customer can be difficult and time consuming. How do you know you are pricing correctly? How do you create consistency across your organization? And more importantly, how do you maximize your profitability without losing business? 

Navigating your way through these challenges usually requires taking a step back to level-set your current processes. So, where do you start?

Master Your Pricing Strategy With DRIVE Profit Builder [Video]

How good are your BI tools at explaining your data?

A BI tool might report you lost half a point of margin last month or gained two points in revenue, but what’s driving those changes often remains a mystery.

If you’re ready to unleash the power of your data, a pricing business application like Profit Builder can be the solution you need. 

Check out the video below to learn more about how Profit Builder works:

The Power of Price-Down Reporting

When there’s a pricing problem at your company, you know it. Still, you struggle to pinpoint what, exactly, the problem is—and how to fix it. 

One critical step towards gaining visibility into your pricing issues is something we like to call “price-down reporting.” In this article, we’ll talk about what that term means, and how to use it to your advantage.

How to Get Your Sales and Pricing Teams on the Same Page [VIDEO]


In many cases, we see sales teams compensated based on the volume they bring in without much focus on pricing. Contrastly, pricing teams are compensated based on improved margins. This creates a natural tension.

So how can your organization improve alignment between pricing and sales teams to ensure business goals are met? Lots of our clients have had similar concerns, so here, we answer frequently asked questions to bring your pricing and sales teams together working toward improved profits and overall success.

Choosing the Right Pricing Partner for Your Organization

This post was originally published on PricingBrew

It may seem counter-intuitive to bring in an outside pricing partner when you already possess expertise in-house. However, with benefits ranging from access to leading pricing technology to insights into cross-industry best practices, the right pricing partner can help even experts magnify the impact they are able to make.

How to Help Your Sales Team Quote with Clear Guidelines

Does this sound familiar? A new customer promised they would place a $30,000 order, but only at an average price per unit of $0.16. The sales rep ran the requested price through their internal process, and because $0.16 was above the required 20 percent margin, the sales rep approved the discount. End of consideration.

But here’s where the story gets interesting. After looking at the average price points for the top 20 customers of this product, the pricing manager determined that significantly bigger customers – with purchase volumes in excess of $100,000 – were paying $0.18 to $0.22 per unit on average. In fact, the third largest customer, at $468,000 in volume, was paying a $0.22 average sale price.

What was the justification for the lower price for the smaller customer – other than the fact that the customer simply asked for it?

Profit Insights | Insight2Profit