My guest blogger is professional pricer *Jon Manning from Sans Prix and Pricing Prophets. Jon makes a compelling case for arguing that if your pricing really is different to your competitors why not make it part of your brand? What do you think? Is your pricing so different you can make it distinctive and part of your unique brand-or do you price the same as most of your competitors?
We’ve all heard about “corporate branding” and “personal branding”, but have you ever thought of giving your Pricing a brand of its own?
As I mentioned in a SmartCompany webinar last year, Apple could easily brand their iTunes Pricing “Why Not?” pricing. You hear a song on the radio that you really want on your iPhone/iPod. It’s only $1.99. Why not buy it? And supermarkets, from Wal-Mart, to Tesco and Asda commonly adopt the generic branding of EDLP, or “Everyday Low Pricing”.
Admittedly, branding your pricing is a difficult task when, like most of your competitors, you are charging by the hour. But if you genuinely price differently to the competition, why not make it part of your own brand?
Recently I caught up with the Managing Partner of a law firm. Not because I needed some legal work done, but because this law firm got rid of timesheets 12 months ago and as part of their move to value-based pricing, the firm also branded their Pricing “Moore’s Agreed Pricing”, or MAP.
It’s really worth thinking about just some of the benefits of this approach to Pricing:
- By branding your pricing with your corporate name (something that users of EDLP often don’t do), you make it unique. As a result, you’ve just differentiated yourself with something the competition can never match (…unless they acquire you). You have ownership.
- But for this to be successful, your pricing has to be truly different from the competition. No more picking up an industry benchmarking report and charging the going rate, or something a few percentage points above or below the competition, just to keep the status quo. Leave it for others to tackle customers’ perceptions of “sameness” and “commoditisation”.
- As a result of the change required, there’s a high likelihood that some sort of company-wide cultural change program will be required. This provides closure to the old pricing model or approach, and excitement and belief around the new pricing model.
- And that sort of change has to include the support from the upper echelons of the organisation: a corporate pricing champion is mandatory.
- Last, but definitely not least, this new approach to pricing needs to get built into the corporate induction program so all new employees understand how and why the business prices this way. This, along with the pricing champion and the cultural change required, embeds the new approach to pricing in the business.
Branding your Pricing is not going to be without its challenges however. Some people will be fast, early adopters, while others will take a while to master it. Some people will find it difficult to have value conversations with customers, when they’ve been used to having price-based (and discounting) conversations with them. And they will need to think about pricing on outputs and deliverables, rather than inputs.
But given that all these challenges can be mitigated, it seems to me that there are many more advantages than disadvantages to branding your Pricing.
*Jon Manning has spent most of his career pricing products and services, in both the corporate world, as well as advising clients via his consulting business Sans Prix. In 2011, he launched the world’s first and only crowdsourcing platform for Pricing (PricingProphets.com) where companies can ask a panel of global pricing experts and thought-leaders what price they should charge for a product or service and why.