Prices: Sell Less with Greater Profitability

The carrot strategy is to implement the right incentives for everyone to be committed to the same goal: the culture of profitability.

Friday, February 1, 2019

Ariel Baños, price management specialist and founder of Fijciondeprecios.com, explains how through the "carrot strategy", companies can move from the "culture of volume" to the "culture of profitability."

The carrot strategy is to implement the right incentives for everyone to be committed to the same goal: the "culture of profitability". It is not an easy path, since it can mean to say "no" to certain businesses contributing volume, but end up deteriorating the final results.

First, educate the sales force, noting through simple exercises and simulations, what the true impact of discounts is on the company's bottom line. Many are surprised, for example, to discover that quantities sold must be doubled if an additional 15% discount is granted on a product with a 30% return on sales.

Regarding commissions, some companies have managed to profitably stimulate sales by granting higher commissions for higher-priced Premium options. This recognizes the superior effort involved in selling differentiated products, in which the role of the salesperson in communicating value is fundamental. Likewise, commissions for those commodities that are more commoditized, such as "self-selling," should be lower.


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Prices: Intelligent Strategies to Improve Profitability

June 2019

Applying segmentation techniques, making comparisons with the prices of other products, and applying discounts to customers who have eco-friendly practices are some of the strategies that can help maximize the sales profitability.

Ariel Baños, a price management specialist and founder of Fijciondeprecicios.com, explains how simple techniques completely applicable to any business can be turned into intelligent and creative pricing strategies to maximize profitability.

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.

How to Compete Against Low Prices

February 2019

The right choice of the marketing system and the partners who will sell the product is key to compete profitably with other options with lower prices.

Ariel Baños, price management specialist and founder of Fijaciondeprecicios.com, explains how through proper marketing, it is possible to compete against the prices of companies manufacturing their products on a large scale and at lower cost, such as those made in China.

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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