When running a business, it is vital to determine the price and cost of your services. By correctly pricing your products, you can also demand a value for them. But how can you determine if your price reflects the value and demand of your services?
The right price depends on the service or product, the client, and the market. Price too low and you leave money on the table. But if the price is too high, then you lose sales. That’s why successful B2B companies, like Konnektors, employ and tailor pricing strategies to maximize profit per client and services.
Cost vs. Price
Basically, Cost includes the expenses for creating a product or service while Price is the optimal amount that a customer should pay for the service. The difference between the price paid and costs incurred is profit.
Yet, there are many variables that can influence the optimal price for a product or service. Since the competition is high in the b2b market with economic changes brought by the pandemic, customers are now more eager to seal the deal at a lower price. But if we consider the heuristics of the service, customer, and market price sensitivities, we can improve pricing for every transaction without compromising one of them.
With effective pricing, B2b companies can grow to earn revenues and profits. This will benefit their clients as well. Yet it’s one of the trickiest elements that B2B sales and marketing leaders deal with.
Your Price Matters
Each customer is unique and has their own price sensitivity. There are customers that are more price-sensitive than others. These customers have different perceptions of value and support for their business. Customers who place a high value on relationship and product support are less price-sensitive than those who perceive these elements to be less significant. Thus, it is important to know where you, as a customer, stand in your business cycle. Are you willing to pay extra for an excellent service? Or are you gonna compromise your business strategy for sealing a low price deal?
The Value We Give
It’s important that B2b companies consider their customer’s willingness to pay. We need to intersect a perceived value where your economic and emotional values are met. Innovators and early adopters are less price-conscious. Why? Because they are more open to possibilities and are willing to take a risk. This creates a high emotional value of gaining a competitive edge and supports high economic value.
However, there are customers who don’t put emotional value to their product. That makes the willingness to pay low as well. With that in mind, Konnektors carefully match your perceived economic value to your price. If you somehow lay in the middle, we price according to the economic drivers tailored specifically to your niche. We support your own pricing metrics and value models.
The best way to price B2B offers is to understand the customer experience, pricing sensitivity, economic and emotional values, to make a long-term relationship. Even though it’s hard to determine the bottom-line price. Konnektors manages your price holistically rather than striving to be the lowest provider.
To learn more about how Konnektors can help your company grow, contact us today.