Prices: How to Avoid Losing Money?

Segmenting customers by prices they are willing to pay, showing the value of the product or service to charge higher prices and being careful when applying discounts are some of the recommendations from experts to avoid losing money.

Friday, July 3, 2020

Ariel Banos, founder of explains some of the myths that exist among business leaders when building a pricing strategy, and what could be the alternatives to not lose money.

Myth #1: Price should be the same for all customers
It must be recognized that the products or services sold are not equally valuable to all customers; for some it is the best option and the price is out of the question. But for another group of customers, it is just another supplier, so the sensitivity to change increases.

Therefore, consumers must be segmented by price. Customers who demand discounts should be asked for something in return, for example, to buy via the digital channel, to demand a minimum volume or to withdraw the product from the store.

This would be a way of segmenting consumers, differentiating between those who will enjoy a lower price and those who will not.

Myth #2: Cost determines price
Companies must be clear that customers will not pay them for the cost of the product or service, as they will value the benefits provided by the proposal or solution.

The value added, the differential that the product or service offered has, is something that must be evident at the time of negotiation to achieve better prices.

Myth #3: Sell more = earn more
In order to implement an appropriate strategy, companies should analyze whether applying discounts and increasing the amount of products or services sold will actually result in more profit.

Discounts do not always translate into more profits, because in many cases the required sales volumes are not reached.

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More on this topic

Prices: Strategy = Profitability

November 2020

Selecting products with limited sales potential because of price, defining the group of clients that will be reached by the promotion and quantifying the profits that the company will receive after offering discounts are factors that must be evaluated when applying strategies of this type.

In order to avoid carrying out promotions in an intuitive way, without an integral evaluation of the action, both in terms of costs and benefits, Ariel Banos, founder of, proposes seven steps to correctly define a Profitable Promotion.

How to Stop Competing Just for Price?

December 2019

Charging tariffs consistent with the positioning of the brand and communicating its differentials with respect to the competition, is essential to stop competing for price and redirect the strategy according to the value of the product.

Ariel Baños, specialist in price management and founder of, explains three strategies to avoid competing only for the price factor, because in these struggles there are no winners and only attract the least loyal customers.

Keys to Stop Competing for Price

April 2019

Identifying a segment that values the differentials of the product or service and charging a price aligned with the company's strategy are essential to avoid competing with the lowest prices in the market.

Ariel Baños, specialist in price management and founder of, explains how through the implementation of an appropriate strategy, it is possible to compete in a market where there are suppliers who charge derisory prices.

How to Set Prices in 2018

December 2017

Planning adjustments to avoid the loss of profitability and redefining discount policies are some of the goals that companies should consider when deciding on their pricing strategy for the new year.

The last weeks of December are generally a good time to evaluate the results of the strategy implemented throughout the year that is ending, and to reevaluate plans for next year. Ariel Baños, a specialist in price management, recommends that companies commit to five principles in order to get the information needed to decide on plans for next year.

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