How and Why to Make Pricing Your Strategic Edge in 2018 | OpenView Labs

Pricing strategy connects your Where to Play and How to Win Choices. It does this by helping you define how you create value for your target segments and how you will capture your fair share of that value. To execute on pricing strategy you have to be able to answer the following questions.

 

Broadly speaking, you need alignment on your Winning Aspirations and your Where to Play Choices before you drop down into How to Win Choices. This framing is based on the work of strategy thought leader Roger Martin and is often referred to as Cascading Choices or Strategic Choice Structuring. See his page on this topic.

 

It is well known that pricing is the most powerful lever that companies can pull to improve profit. From the classic article, by Michael Marn and Robert Rosiello in Harvard Business Review,

 

“The right price can boost profit faster than increasing volume will; the wrong price can shrink it just as quickly. Yet many otherwise tough-minded managers shy away from initiatives to improve price for fear that they will alienate or lose customers. The result of not managing price performance, however, is far more damaging.”

 

 

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