Prices: How to Increase Profitability?

Estimating how much customers would pay if they bought from a competitor and defining how the product offered differs from others are some of the strategies used to help increase sales profitability.

Friday, November 30, 2018

Ariel Banos, specialist in price management and founder of Fijaciondeprecios.com, explains how through the "umbrella strategy" companies can stop using discounts as the only selling tool.

The first step is to open the umbrella. This means identifying the real differentials of your proposal and then communicating them clearly, so you can protect yourself from the discounts rain.

To clearly identify the differentials between your proposal and your competitors:

1. Identify your most representative customers. Define for each: what would be their best alternative (competitor) if they didn't buy from you? How much would they pay for that alternative?

2. Then, define for each client: What factors make them choose your proposal? What are the differentials that make it more attractive?

3. Finally, try to translate these differentials into economic terms: How much is each differential in your proposal worth to the client? How much does it represent in terms of savings or higher income? What additional costs would the client have to pay if you did not offer that differential?

See more in Fijaciondeprecios.com

More on this topic

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 Fijaciondeprecios.com, 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.

More Attention to Price Management

October 2018

Only a few companies are aware of the true impact of a proper strategy and price management on the profitability of the organization.

Ariel Baños, pricing specialist and founder of Fijaciondeprecios.com, explains why it is critical for organizations to control the variable with the most impact on their results, and details the five reasons for implementing a pricing area in companies:

Prices: Main Factor in Profitability

January 2018

Controlling and professionally establishing the price of what is sold is essential for a company in order to be successful and obtain an adequate return.

Ariel Baños, founding economist of Fijaciondeprecios.com, presents 10 essential actions to ensure proper management of the prices of what a company sells.

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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