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, 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.

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