Pricing is a powerful profitability lever if it is set correctly. A well-designed pricing strategy leveraging data, incorporating defined processes and embedding people can quickly boost a company's bottom line.
Indeed with the constantly evolving biopharma market, intensifying competition and rising customers' expectations, contract services providers and suppliers must seriously think about their pricing strategies to drive sustainable growth.
But what's the best strategy to adopt ?
There is no magic pricing strategy that works for every company but there are some elementary tools that help set the right price and make a new pricing approach work.
A smart pricing strategy firstly relies on solid data and analytics on the market, customers, prospects and competitors.
Companies need to perfectly understand the dynamics of their market segments. They need to assess their maturity level and their drivers. Whether a company is positioned on commodity or highly differentiating services will greatly influence its pricing strategy.
Companies should also define the value of each of their services for customers. They need to collect insights from customers and prospects to define how valuable are their services. They should perform interviews to investigate customers' Key Purchasing Criteria, understand their buying journey, their needs and expectations. They also need to gather feedbacks on their strengths and weaknesses to prepare their pricing argumentation. The better a company understands its customers, the easier it is to drive value for them and set a price accordingly.
Finally, companies need to benchmark competition for each of their services in order to compare their pricing and value proposition and adapt their strategy. They need to find out about their current positioning and their competitive advantages to leverage them in their pricing. Competitive intelligence is essential to create a compelling and differentiating offer.
In addition to the price, the pricing structure and processes should also be investigated and defined. Changing the way of charging can also be a good lever to win customers.
All of this data should be carefully collected, analyzed and leveraged to set the right price for each service with the right pricing structure and processes. If pricing is supported by data and conveys clear value, customers are more likely to be willing to pay the price.
It is not a big secret : a company beating its competitors at the customer value game will ultimately win the customer race.
A price can only be credible if employees believe in it. Sales representatives should take part in the creation of the pricing strategy, to bring their knowledge and insights on customers and their vision of the company. Pricing is closely related to the perceived brand value so Sales and Marketing teams should cooperate to build the rational and emotional value argumentation for customers.
Once executed, the pricing strategy performance should be carefully monitored. Pricing performance analysis is essential to help decision makers adjust the prices and get the most value from every transaction. Sales forces should collect feedbacks on the new pricing approach and use those insights to tailor their offerings more closely to the customers' needs.
Pricing strategy should be well-thought-out but should not be unchangeable. It should evolve with the company's performances, brand value, market dynamics, competitors' moves and clients' wishes.
Pricing strategy creation or optimization is a crucial and tricky task requiring to analyze many different variables and huge amounts of data. The biopharma industry with all its intricacies makes this process even more complex.
Our clients can count on us and our unrivaled expertise of the biopharma industry to sort it out and help them turn pricing into a powerful and sustainable profit machinery.
For decades, Larka has been helping contract services providers and equipement suppliers making smart pricing decisions to stay ahead of the competition.
We work hand in hand with our clients to develop customized pricing strategy, structure and processes that fit with their competitive environment, brand and business positioning, and market dynamics, for them to drive sustainable growth for their business.
Our proprietary Business Intelligence platform and benchmarking, our powerful analytical tools and data scientists and our pricing specialists will be at your service to design a pricing strategy that will boost your bottom line.
Whether you need help for your entire marketing and sales development or for one specific item, Larka is your partner to leverage your full potential and reach new heights.