Strategic Pricing

More than just pricing

Price is one of the decisive factors when the market decides on an investment. Even so important that an incorrect price may cause the market to choose another product / solution even though its quality far exceeds its competitors as we all know, still so many companies are behind when it comes to Strategic Pricing.

“Even if you initially have set a correct price, the difference in revenue can be as much as 20-30% or more, just based on the structure in itself.”

The price is not a one-time deal to be forget after it is set. In addition to reflecting related costs, it is even more important that the price also takes into account the changing needs of the market, which has an overall effect.

Pricing is a crucial component that must correlate with the product’s net value, market needs, expectations and competition over the entire life cycle of product as well as including possible reinvestment’s. It also has a fundamental impact on Customers Experienced Quality. Incorrect pricing will therefore have a double negative effect as you lose both the expected benefit as well as creating a negative spiral, often unnoticed.

“It does not matter how skilled staff you have, how experienced they are, how good the product is or how good service you offer if the price does not reflect market needs, demands and conditions.”

It is unfortunately common among companies that they have incorrect pricing without being aware of it, since in lack of competence the wrongly done pricing strategy is interpreted as a correct one by, resulting in loss of revenue combined with targeting incorrect actions. A pricing strategy can be both static, flexible or a combination of both. The importance is the structured foundation that has to be based on the company’s overall strategic goals as well as a correct and thorough market analysis and know how.

Strategic Pricing is part of your Pricing Structure

Strategic Pricing is one of three important components when planning your basic Pricing Structure. Even though this particular example is best suited for B2B and more complex products/solutions, the principles can be adopted for any industry.

1. Basic Pricing
2. Strategic Pricing
3. Business Models

Planning your Strategic Pricing, must include all three steps in correct order, meaning you can not exclude the first step, Basic Pricing, before you plan your Strategic Pricing. When properly done, the structure can be adopted with built in flexibility often necessary when communicating and negotiating with fast moving market. One of the many benefits of a clear and well-thought-out structure and strategy, is that you both ensure continuous quality and image at the same time you as you have a stronger over all product/solution.

“A correct pricing structure and strategy make your business independent of few individual and ensures a high overall result within the group.”

A Pricing Structure may be more or less complex and they may differ widely from each other depending on product, solution and/or industry. But all businesses require a properly designed basic Pricing Structure based on the overall Strategy. 

If you have any questions or concerns, please contact us.



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Hit Rate % below 50 is not good enough

It’s often I can hear excuses for a low Hit Rate %, such as e.g. that the product is wrong, the market is too tough, it’s to few sales reps,  more marketing is needed etc.

A low Hit Rate is mostly based on your own performance

A Hit Rate should be high, over 50 % even if your product / solution not is the market-leading one. Hit Rate % is largely based on your ability to plan and work strategically towards the right market at the right time.

Here are five actions that significantly improve your Hit Rate:

  1. Target Groups – Define your Target Groups in detail, even if your company already has one.
  2. Value Propositions – Define net based value propositions for each Target Groups
  3. Business Model – Create a specific business model for each target Target Group
  4. Optimize communication – Plan the best way to communicate, event, meetings, lectures etc, and when
  5. Optimize Meetings – Plan your meetings in detail, when, how, with who, and don’t do anything with out a thought. Work tactically and let the customer close.

Take those specified actions and you will guaranteed improve your Hit Rate above 50 %.



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Strategic Product Packaging

Strategic Packaging is the way you choose to communicate your Product, (hardware, software, services, and / or solutions), toward a defined target market with the goal of maximizing and achieving optimal results while maintaining or improving confirmed customer-experienced quality

When talking about Packaging we usually think of physical packaging, even if packaging cover other areas as well. Strategic Product Packaging is the extension of all packaging, and is crucial in today’s fast moving markets. Strategic Product Packaging is How, When and to Whom you communicate your product In order to maximize your market position.

It’s a long time ago it only concerned Sales, and Marketing. In order to optimize your strategy it has to include the entire organization. We take it even further and include the customer and it’s experience. Being business minded is to include Strategic Product Packaging  as part of the on-going executive strategic process.

Part 1 – What is Strategic Packaging
2 – Goals, Segmentation and Defining the Product (December 20th)
Part 3 –
Business Models  and Mapping (End of December)
Part 4 –
Strategic Pricing (Method and Template)
Part 5 –
Communication Templates & Activity Planning

“Nespresso created a new product, where the customer can simply could prepare coffee with coffee capsules in a simple and trendy way. An example where Physical- and Strategic Product Packaging created a market leader based on an old product – coffee”