Coming out of the first phase of the COVID-19 crisis, several strategic areas are being redesigned. The review and restructuring of the price strategy is a very important task. In addition, we are talking about a specific task within the business strategy, which also has serious mental factors. So it is a mental-based change in a completely mentally changed business environment. I think that this sentence should be enough of a wake-up call for us to realise: we have to take this seriously now! Let’s see what a business developer with experience in developing a price strategy has to offer!
Self-testing
It is very important to first understand what ideas drive us, the decision-makers, and key people who are the first to decide on pricing and business strategy in general, and also when it comes to pricing. To do this, we need to define our own original personality. Once we have done this, we need to look at whether the product we are offering, and the target group we are targeting, is in line with our own personality. If the difference is significant, then we need to see that everything we like and want in terms of pricing can certainly be detrimental to our own business or our company’s business. If this trio is mentally close, however, we should feel free to rely on our experiences from our private lives. It is very important to be aware of this mindset with regard to our key people, because it is along these lines that we can assess the extent to which we can give credit to their reports. Not because they are not telling the truth. Not because they want to work against us. It is simply because if someone thinks it is a waste of money to throw money away on expensive things, they will only remember in client meetings that the client “thought the product was expensive”, even if it happened once in, say, twenty meetings, and even if they may not have said so specifically, they simply refused to see our key person. After all, they think it is “inherently expensive” and no one will be able to move it forward. They can be persuaded otherwise, but despite all the work invested, we can still end up with a maximally discredited representative of our pricing, which is certainly not good for our business. This leads straight to the next thing to do: if we really want prices that fit our product, and we see that our own people, or even ourselves, will not be able to achieve this, we need to bring in new people to do it. Even if this seems cruel, it should not be done by someone who is struggling with their own complexes in this area, especially if the company has unique knowledge in the market.
Tester pricing
After a proper introspection, there is nothing left to do but to set the initial price. The most experienced strategists will immediately apply two price levels when launching a new product or when redefining the market for an existing product. One is used to set an image level and the other is an introductory price – lower than the first – to test market reactions. It is then possible to move either up or down in time before the official launch. Of course, testing requires customer reactions, but it is very important that they are from the truly targeted customer base, otherwise the reactions can be misleading. Testing itself is a concrete sales process with specific mechanisms built in, from which sales are generated, but this is not its main purpose. During this period, you need to be very sensitive to feedback, and a real business developer is prepared for this. In any case, we must be very careful not to deviate from the direction we have chosen. If we are a knowledge-based company, we have to meet the premium criteria, and if we go in the mass direction, we have to follow the rules there. Most pricing issues, by the way, are a major challenge for smaller businesses, who cannot afford international teams that focus only on this for a particular market process. But even the big market research firms can fall flat in this area when a market situation arises, such as now after the pandemic. Whatever the direction, common sense must always apply!