What Do Pricing Strategy Consultants Do?
In most cases, companies simply set their prices in line with the competition or simply increase their cost price by a margin. Pricing strategy consultants, on the other hand, will use different methods to maximize your sales and maximize your profits. Here are some examples of strategies they can implement:
- Competitive and Industry Analysis: The consultant will conduct an analysis of market trends, the best in your industry and the policies adopted by your competitors. He will also analyze the impact of prices on your market shares, margins and consumer behavior. A pricing expert will try to anticipate the impact of prices on your market share, sales and profitability using forecasting models.
- Pricing and marketing consistency: It is important that your pricing strategy is consistent with your marketing strategy. Price is an important decision element for the consumer and must therefore be determined intelligently according to your brand, your product and the targeted customer segment.
- Analysis of consumer trends: Consumer needs are constantly changing in a competitive environment, and with them consumer behavior. The consultant must therefore be attentive to the market to anticipate these evolutions and be able to seize any opportunity to boost your sales or improve your profitability.
- Implementing dynamic pricing: To survive in the face of competition, a company must be flexible and able to adapt quickly. It can then be interesting to set up a dynamic pricing strategy thanks to the diffusion of pricing tools in all the functions of the company. In this way, the company will reduce its reaction time to market developments. Once the consultant has chosen the right pricing strategy, he will present his conclusions to management in a clear and concise manner. The measures to be taken will then be chosen together by the company and the consultant with the aim of increasing sales, improving the company's profitability and improving marketing campaigns.
Most In-Demand Services of Pricing Strategy Consultants
Why Hire Pricing Strategy Consultants?
In the past, a company's pricing strategy often consisted of adding a margin to the cost price of the products or services sold. However, the tertiarisation of the economy and the increase in competition have greatly changed this. Setting a price has indeed become a technical subject for which qualitative and quantitative analyses have become the norm.
It is to your advantage to use a pricing consultant because he can not only improve the profitability of your company but also give you a competitive advantage. Here are some of the benefits you could get from this mission :
- Determining the right price: A pricing specialist will seek to determine the price of your products in order to find the best compromise between maximizing your sales volumes, your profitability and your brand positioning. To do so, he will analyze many factors such as revenue objectives, marketing objectives, target audience, brand positioning and product attributes. He will also analyze external factors such as customer demand, competitors' pricing strategies, and market and economic trends. He will then propose the implementation of a complete pricing system, including discounting and margin differentiation possibilities according to distributors.
- While many of your competitors simply apply a margin on their costs, you will have the opportunity to take advantage of a whole pricing system. In addition to setting a fair price, you will have the ability to grant targeted discounts according to your customer segments and to differentiate the margins taken by each of your distributors. This will give you a real competitive advantage because you will be able to stay one step ahead of the competition and become an actor rather than a spectator.
- Thanks to his experience in different situations, the pricing strategy consultant will be able to save you time when analyzing your problems and deploying the right solutions. On top of that, you will also avoid monopolizing your teams on a technical subject when they do not necessarily have the necessary expertise. You will then be able to better allocate your resources and thus gain in efficiency.
- The price of a product says a lot about its positioning compared to competing products and can be a key determinant in the customer's decision process. With a good price, you will be able to better position your product in relation to your target customers and therefore improve the perception they will have of your brand. This explains why some brands are able to charge some customers much more than others.
- There are no less than 14 possible pricing strategies depending on your industry, product and situation. It is therefore in your best interest to call on an expert in these different strategies, whether it be cost-based pricing, dynamic pricing, pricing to conquer a market, pricing based on the perceived value of your product, etc.
With all this, you can turn a slight increase in your margins into a significant gain on your bottom line.
A pricing consultant will also ensure that your pricing strategies take into account the key criteria that consumers consider when making a purchase decision in order to attract and retain new customers. A creative and dynamic pricing structure will also arouse the curiosity of dormant customers who have not made any recent purchases.
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Tips on How to Hire Pricing Strategy Consultants
Pricing strategy consultants must have many skills as they are between two worlds: the business world focused on costs and the customer world focused on value creation. So it is important that you recruit the right candidate to ensure you get the results you want. Here are some of the skills you should check out:
Experience in your field: It is pointless to look for a consultant with the perfect CV when it comes to pricing strategy consulting. So you have to look for candidates who have experience with the pricing problem you are facing. He will then be much better able to understand your situation and offer you adapted solutions.
Understand the consumer: A good pricing consultant must be able to put himself in the consumer's shoes: What is valuable to him? What are his needs? How does he perceive your products? Psychology plays an important role in the consumer's decision making. These decisions are often not rational but based on emotions and desires. The better your consultant's understanding of your consumers, the easier it will be for him to help you set the right price.
How to increase your sales speed: The speed of sale refers to the average time it takes your customers to make the decision to buy. This speed of sale depends a lot on the price of the product, since if it is too high, the customer will think longer before deciding. The faster this speed is, the better the company's ability to generate sales and therefore to grow.
Knowing how to deal with price threats: The first threat comes from the price war: a powerful tool often used by companies to try to eliminate competition. But the threat can also come from within the company. Changing too often dynamic pricing policies or giving unnecessary discounts can not only reduce your margins but also make your customers unhappy. All of this therefore presents significant risks that you must know how to react to and that must be re-evaluated regularly.
Knowing how to exploit pricing margins: You can make a lot of profit from exploiting small pricing margins and ultimately improve your bottom line. It's a very powerful weapon in the array of pricing strategies that you need to know how to exploit.
Understand the technology: There are many pricing tools that allow companies to improve their pricing processes and also allow teams to better understand the impact of pricing on your business or the latest market trends. A pricing expert must therefore be familiar with the different technologies in this field and keep abreast of new developments. In this way, he will be able to advise companies on the tool that is best suited to their situation and that will make them more efficient.
On the other hand, a pricing expert is also at the intersection between the company's finance function and the R&D department. While he must obviously have a structured and analytical mind, but also be innovative and creative, he must also have knowledge in the following areas :
- Sales management.
- Corporate finance.
- Product management.
- Business operations.
- Business management.
It is difficult to find the ideal pricing consultant since it is a specialized subject and depends on the industry you are in. That's where Consultport comes in. We offer high-level pricing strategy consultants who have already been rigorously selected and vetted. By matching their expertise with your company's needs, you are sure to find the consultant who will guide you in finding the right strategy.