Price Management: Lessons from 2020

Taking advantage of shortages to sell at high prices and visualizing the benefits to companies of strategies that demonstrate social empathy in difficult times are some of the lessons learned during 2020, which was highlighted by the health and economic crisis.

Wednesday, December 23, 2020

The spread of covid-19 suddenly transformed the global business landscape. Ariel Banos, founder of Fijaciondeprecios.com, has identified five lessons that companies learned in terms of price management, in this context of changing commercial reality.

Detail of the lessons identified by the author:

1. Timing is everything: During the pandemic we have seen similar pricing behaviors in different sectors. When there is an extraordinary demand for a product or service, and the supply (companies) does not have the capacity to respond immediately, prices go up. However, the initial price bubble usually bursts shortly thereafter, when supply manages to accommodate.

Then, profitability, especially at above-average levels, is reserved only for those companies that have the speed to seize the opportunities. The timing of our proposal is critical if we are to capture higher margins.

2. Flexibility goes up: "flex" pricing modalities have become a great alternative in this economic and social environment where uncertainty seems to persist. Among the multiple variants we find: "Hire and cancel in a simple and fast way", "Pay only for what you use", "Pay only for what you need", "Buy the strictly necessary amount", "Pay according to the result obtained" and "Change or cancel without extra cost or worries".

3. Define Prices without ignoring Social Empathy: Demonstrating social empathy in difficult times, using selective discounts for affected sectors, and even free options, represents a valuable investment for companies.

4. Valuing online proposals: the pandemic is contributing to change the traditional perception. There has been a great valorization of the virtual proposals, which in many cases are the only options available, and have been able to demonstrate that they are able to successfully meet the needs of customers. Remote medicine, artistic shows, congresses and events, education and executive training, consulting, among many other sectors, have shown that the online variants create a similar value, and sometimes even higher, than their traditional equivalents.

These good experiences will go beyond the pandemic situation, and will allow a repositioning of the virtual proposals, accompanied by an improvement in their sales prices.

5. Pandemic: new costs ... and new differentials: Costs of complying with health and safety protocols were transformed by some companies into opportunities to differentiate themselves by providing a protected shopping experience.

This was a great opportunity to transform an unpleasant additional cost into an advantage in the eyes of customers, and thus defend more forcefully the prices charged.

See full article.

Do you need to analyze the new commercial reality and its impact on companies?
Check out the "Market and economic situation monitoring system in Central American countries", developed by CentralAmericaData.



More on this topic

Prices: How to Decommodify our Proposal?

August 2020

"If we overcome the mental barrier of commoditization, identifying and communicating those added values going beyond our basic proposal, we will have the opportunity to take our profitability to another level."

Ariel Banos, founder of Fijaciondeprecios.com explains that when a proposal is a commodity, in other words, it lacks differentiation with respect to others offered in the market, the only alternative is to align itself with the prices charged by competitors. There are no magic solutions.

How to Sell at Higher Prices?

June 2020

In order to reach customers who, have great uncertainty at the time of purchase and to improve the unit margin of the products sold, flexibility must be offered in the cancellation conditions to increase the probability of successful sales, even at higher prices.

In difficult times, such as the current scenario generated by covid-19, the companies that win will be those that provide greater peace of mind to their customers, even if they sell their products at higher prices.

Prices: Discounts in Times of Pandemic?

April 2020

In the current complicated context, companies must reconsider their strategies so as not to fall into the error of making aggressive discounts, since they could affect the positioning of their products in the medium and long term.

Ariel Baños, a specialist in price management and founder of Fijaciondeprecios.com, explains some of the important conditions that must be considered when deciding to make discounts in an environment of high uncertainty such as that which has generated the current crisis of covid-19.

Pricing Strategy in Times of Crisis

March 2020

Demonstrating solidarity with customers through reasonable prices and preventing monopolization to ensure greater market coverage are some of the strategies that experts recommend to companies in contexts such as the current one.

Ariel Banos, specialist in price management and founder of Fijaciondeprecios.com, explains three strategies generating responsible behavior in an environment of high uncertainty as the current crisis of the coronavirus.

 close (x)

Receive more news about Marketing and Sales

Suscribe FOR FREE to CentralAmericaDATA EXPRESS.
The most important news of Central America, every day.

Type in your e-mail address:

* Al suscribirse, estará aceptando los terminos y condiciones


Stock Indexes

(Apr 6)
Dow Jones
-5.60%
S&P 500
-5.10%
Nasdaq
-5.64%

Commodities

(Oct 15)
Brent Crude Oil
84.16
Coffee "C"
206.20
Gold
1,767
Silver
23.36