When people talk about pricing strategies, often the assumption is that there is a single pricing strategy that is right for every company. The fact is that pricing against competition differs entirely from pricing to launch a new product or to penetrate new markets. Our Pricing & Costing practice is designed to help you find the right strategy for the game you are playing, considering the full context of customer value, competition, and your own economic factors.
P ricing is perhaps the most critical component of corporate strategy as it sets the tone for how your customer perceives your services or product and also determines how you manage your organization’s finances. Yet pricing is often misunderstood as most companies simply benchmark their prices against their competitors, which ignores differences in cost structure, value proposition, market position, size, and differentiation. While some undercharge and leave money on the table, many overcharge and “price” themselves out of the market. Our Pricing & Costing practice is designed to help companies tackle this very problem. Here is how we help.
“Price is what you pay,
value is what you get.”
– Warren Buffett
One of the main causes for mispricing a product or service is the failure to capture all the costs related to production. We help companies decompose their costs and determine their true unit economics by taking into account factors such as capacity constraints, production volume, and economies of scale so they can grow profitably with confidence.
Imagine if your company could measure, customize, and charge for—in real time—the value your products or services create for each customer. Seized to its fullest extent, such an opportunity would enable you to provide more value to more customers and still earn more money. We help companies set price dynamically using real-time, advanced analytics so they can scales prices up or down on the basis of the value an individual customer derives.
Determining the right revenue model for your product or service can be a challenging process as one needs to be cognizant of consumer behavior, purchase cycles, competing products, and demand elasticity. We help companies develop revenue models that captures these factors while reflecting their value proposition and cost structures.
There are times when a business must undergo significant changes as a result of disruption or industry rivalry. Innovative revenue and cost models must be developed to address these competitive pressures. We help companies redesign their business model from the ground up so they can not only withstand competition but also emerge as a more agile and innovative player in the marketplace.