Creating value that counts in a customer-centric world and boosting margins at a time of market volatility is the biggest challenge for pricing organizations today.
Expectations are high, inflation is steep, competition is tight, and disruption has become the norm—and so pricing organizations are shifting their focus from one thing to another before they can even strategize their next move, often compromising cross-functional collaboration, customer satisfaction, and ultimately, value.
To help US-based organizations successfully tackle these global issues and optimize their pricing strategies, Copperberg has partnered up with Zilliant for the 2023 Manufacturing Pricing Excellence US Virtual Seminar this December where attendees will learn how to quantify the intangible elements of value, how to connect pricing to the customer digital journey, and how global crisis situations influence price management.
Measuring the supposedly immeasurable elements of value
Intangible assets are some of the most important contributors to a firm’s profitability growth and continued market power. And yet, many are struggling to quantify the value of intangibles and thus remain guarded on the prospect of intangible-driven earnings. As of 2020, industry experts have declared that intangible value accounts for 70% of global enterprise value and the value of such assets will continue to rise.
Although recognized as salient drivers of long-term profitable growth, in today’s inflationary environment when customer expectations are high and competition is tight, intangible assets have become important sources of competitive advantage and higher returns. They create a unique opportunity for pricing organizations to boost margins.
Paolo De Angeli, the Head of Customer Experience and Customer Value Management at Borealis, believes that “everything can be quantified” although it may be difficult to achieve. At this year’s Manufacturing Pricing Excellence Virtual US Seminar, he will reveal viable methods for quantifying intangibles, from systematically aligning assets with the company’s prime objectives and strategies to determining the fair worth of those assets.
Part of the issues related to quantifying intangibles can be solved by dialing up efforts to better know customers. Having an authentic interest in their customer base will allow industry players to identify which value drivers matter the most to each client. Once firms gain a better understanding of how to create differential value for customers, a grounded value-based pricing strategy can help them deliver that value to customers and boost their margins in turn.
Connecting pricing to the customer’s digital journey
To excel commercially, pricing professionals must keep their focus on the customer. This is becoming harder to achieve as inflation and other disruptions are creating challenges for companies, but the same issues are causing customer confidence and relationships to deteriorate. It’s more important than ever to focus on the customer and put them at the heart of the pricing strategy.
Schneider Electric, a global provider of energy management and automation digital solutions for efficiency and sustainability, will share its expert tips on how to consolidate both customer trust and sustainable pricing by connecting pricing to the customer’s digital journey at this year’s event.
The company leverages a variety of pricing models, from product pricing to digital pricing, and subscription-based pricing, to cater to its wide customer base. Beyond price optimization, the company recommends taking into account other considerations such as cross-functional collaboration to centralize pricing, commercial excellence to differentiate on the market, and digital selling maturity models that emphasize the importance of pricing in digital selling.
Considering that the manufacturing industry overall is shifting to a hybrid model consisting of both online and offline assets, pricing likewise needs a hybrid approach. Although some customers continue to make offline purchases and traditional transactions, most of them have become accustomed to online purchases and digital products, especially during the pandemic, and now they prefer online interactions, digital solutions, and self-services more than ever before.
The customer is becoming the center of everything both online and offline, and their experiences either consolidate or break their trust. Putting the customer at the heart of the business is now the new norm and so how does this new norm align with pricing? What would pricing look like when putting the customer at the center?
As companies are designing customer journeys, they need to consider how to digitize those journeys, how interactions would look at every touchpoint, and mapping out the journey in a way that connects to pricing.
Experts advise starting doing so sooner rather than later because predictions claim that 80% of B2B sales interactions are expected to occur through digital channels by 2025 and as many as 70% of B2B buyers have already come to expect an Amazon-like experience from their vendors. And these trends have been accelerated by the global pandemic.
Reflecting upon the impact of global crises on price management
The global crisis created by the COVID-19 pandemic has undoubtedly forced the industry to shift gears in more ways than one. And while some businesses have reacted to it by accelerating processes and making ad-hoc changes for business continuity, not many have had the opportunity to pivot sustainable pricing models since.
And that is because crisis situations continued to arise. Beyond the effects of the global pandemic, the industry and indeed the world, had to face the increased cost pressure created by the bizarre Suez Canal situation on March 23, 2021, when Ever Given, a giant container ship, become lodged sideways in the Canal due to high winds and low visibility from an Egyptian sandstorm, blocking the world’s busiest corridor for six days and freezing $40 billion worth of trade.
Now, geopolitical conflicts loom large as a risk to domestic economic growth, and concerns in this regard are continuing to grow and cause overall economic optimism to decline. These crises are influencing volatile energy prices, rising interest rates, labor shortages, and increased economic volatility—all of which are in turn affecting pricing across the industry, thus creating an even bigger global crisis in and of itself.
But as Albert Einstein once said, “in the midst of every crisis, lies a great opportunity.” So how can pricing organizations translate the current crisis into an opportunity?
Andréas Stepien, Manager of Pricing Excellence at Duni Group, will reveal the answer and more at this year’s virtual seminar. His key recommendation is to understand stakeholders, gauge the customer’s willingness to pay, collaborate with sales, and understand the impact on the backend. Pricing connects the dots between these seemingly disparate business aspects.
Find out exactly how to put this into practice and likewise how to connect pricing to the customer’s digital journey and make the intangible tangible at the 2023 Manufacturing Pricing Excellence US Virtual Seminar this December.