Blog >
Pricing

Pricing

Umbrex is pleased to welcome Ahmad Mansour with Rare Capital. Ahmad describes his expertise: I started my career as an entrepreneur, co-founding two technology startups (B2C and B2B). As a Sr. Engagement Manager at McKinsey, I led top line growth (marketing and sales) and operations optimization for PE-backed B2B technology portfolio companies; in addition, I led investment and commercial due diligences for top private equity companies on tech assets (B2B, B2C). Key Accomplishments: Independent Advisor: Advised top PE/Growth Equity/Hedge funds/VC…
Pricing thought leader Ian Tidswell shares B2B price research methods to set list and target prices in this article. Having a robust way to assess customers’ Willingness-to-Pay (WTP) is a key capability required of all companies.  It’s surprising to me how many B2B companies rely on gut-feel or ad hoc processes to get this done.  This may be driven in part at least from not being familiar with the techniques, and the various challenges each presents, along with a more…
Kedar Gharpure shares an article on pricing and a warning on the pitfalls of discounting prices in the hope of gaining volume sales. Price is an important negotiation element in any B2B sale – and often made out to be a sticking point by the customers. Hence, it is no wonder that B2B companies often consider discounting their prices to win a deal or to secure more volume. However, most companies usually underestimate the incremental volume that they will need…
Kedar Gharpure shares an article on value-based pricing for B2B, what it is, and why you should use it.  You have likely read articles about Value-Based Pricing (VBP) – after all, the concept has been around for several decades. However, our review of over 50 VBP articles from the top search results highlight that a) there is very little VBP literature geared towards B2B and b) no single article provides a comprehensive and actionable overview of VBP for B2B.  In…
Ian Tidswell shares an article co-written by Ofer Levi that shares four reasons customers will accept cost increases. As China cleans up its manufacturing companies, some raw material prices are increasing or are scarce. While never easy, passing on cost increases can be done with a simple explanation, communicated clearly to sales and customers. The amount of increase possible will depend on the competitive context. Don’t forget to use your other commercial policy levers! China is working to reduce it’s…
Pricing is always an important topic for companies, but in these days of high inflation and disrupted supply chains — as well as the uncertainty brought about by the pandemic — it’s become critical. Yet many companies are struggling, not having had to flex their pricing increase muscles for a few years.  “Pricing is a product-centric idea,” says Ian Tidswell, an independent consultant focusing on B2B pricing and the co-founder of Ideal Price. Pricing is usually set depending on how…
Kedar Gharpure shares a company post on developing and applying value-based pricing for the B2B market. You have likely read articles about Value-Based Pricing (VBP) – after all, the concept has been around for several decades. However, our review of over 50 VBP articles from the top search results highlight that a) there is very little VBP literature geared towards B2B and b) no single article provides a comprehensive and actionable overview of VBP for B2B.  In this article, we…
Ian Tidswell shares an evergreen, ever-valuable post on how to determine the hidden value of your new product or service. You innovate to keep ahead of the competition. But do you understand what your customer perceives as valuable? Let’s review what all the possible sources of value are for B2B products and services (note I’ll refer to product below but it also applies for services and solutions).  In my next blog, I’ll talk about ways to capture that value by…
From archives of Ian Tidswell’s website, this evergreen article explores pricing in uncertain markets and how to handle foreign exchange movements. “The best laid plans of mice and men often go awry” said Robert Burns in 1786.  And while he wasn’t to my knowledge a businessman, the saying holds true today. When things change in commerce, pricing is one of the most effective levers we have to react quickly.  Making the most of an opportunity (or minimizing a threat) is…
Kedar Gharpure shares an article on pricing and why you should think twice before lowering price to increase sales.  Price is an important negotiation element in any B2B sale – and often made out to be a sticking point by the customers. Hence, it is no wonder that B2B companies often consider discounting their prices to win a deal or to secure more volume. However, most companies usually underestimate the incremental volume that they will need to sell to make…
Kedar Gharpure shares an article that identifies key factors involved in B2B value-based pricing. You have likely read articles about Value-Based Pricing (VBP) – after all, the concept has been around for several decades. However, our review of over 50 VBP articles from the top search results highlight that a) there is very little VBP literature geared towards B2B and b) no single article provides a comprehensive and actionable overview of VBP for B2B.  In this article, we provide a…
Ian Tidswell provides insight into the psychology of pricing. Why are we often less than completely rational? Delving into psychology, one can think of the brain as having two types of circuits: system 1 and system 2 (Kahneman) or elephant and rider (Haidt). The elephant (system 1) acts quickly and seemingly automatically, following a set of pre-programmed rules. It’s in control when you react to seeing a family member, catch a ball thrown at you, answer simple questions like 2+2…
This post from Nora Ghaoui takes a look at revenue models that work for smart products with a digital service. Making a smart product needs more than adding an app. You need to cover the costs of the digital service or risk losing money. Which revenue model can you use? And why would anyone pay for this service? The revenue model for a digital service needs to cover the costs of running it Let’s consider the options for a new…
Ian Tidswell shares a guide on B2B price guidance, why it’s important, and what type of price guidance to give.   (Sorry, this one’s a bit long. It’s also a key to superior B2B pricing) Providing high-quality price guidance to your sales teams as they negotiate with customers can result in measurable profit increases. It really should be a core process.  However, I’ve rarely seen clear quality-price guidance. Here are some key questions to ask:   Why is price guidance important?…
David Burnie shares the second article in a series on the future of P&C insurance in Canada.  In our first article outlining the future of P&C Insurance in Canada, we discussed how insurers have been and are continuing to invest in digital transformation agendas in an effort to reshape distribution and service in an industry that has been relatively slow to adopt modern business practices. We illustrated how the sector will evolve by focusing on how consumers (both individuals and…
  Kedar Gharpure shares a useful post and a practical guide to help companies choose their B2B pricing tools.   We reviewed over 50 B2B pricing tools, here is what we found The B2B pricing tools landscape is getting increasingly crowded. Today, there are over 50 pricing products and solutions from the leading vendors alone. All vendors offer SaaS based tools that promise a rapid deployment. All vendors also offer analytics or machine learning or AI to deliver a superior…
Umbrex is pleased to welcome James Wilton with  Monevate. James Wilton spent 3 years at McKinsey and Company, where he led the pricing service line at Fuel (McKinsey’s practice for startups), and recently left to found Monevate, a pricing strategy consulting firm focused on serving growth-stage companies. He has ~15 years experience in consulting roles, with ~9 years focused on pricing strategy transformation and new product pricing. Prior to joining McKinsey, he served as the Head of Strategic Pricing at…
  Jason George provides a riveting read on cost and value, cunning tactics, and strategies from behind the scenes of manufacturers and pricing models. Sleep tight The choice of a mattress is fraught with implications, given how much of life is spent asleep and the infrequency of their purchase, not to mention the high price tag. Manufacturers are keenly aware of this and do their best to stoke the wallet-opening concerns of customers, using florid language to highlight coil counts…
Umbrex is pleased to welcome Wayne Patten with Innovation Strategies. Wayne has over 30 years of experience in consulting to senior leadership in companies of all sizes. In 2000, Mr. Patten founded Innovation Strategies, LLC to focus on helping clients achieve significant organic growth and operational excellence. Prior to founding Innovation Strategies, he co-founded Prism Consulting International, and helped grow the firm to over 25 consultants. He also worked as a strategy consultant for Booz-Allen & Hamilton. Mr. Patten has…
  Ian Tidswell provides insight into the strange pricing practices fueled by loyalty programs, credit card programs, fees, and customer perception of value.  Utpal Dholakia always has interesting posts on pricing.  This one got me thinking about the strange way that buying a coffee can result in wealth transfer to an airline.   Airlines make a lot of money off of their loyalty programs (often all of their profit). 71% of those miles are purchased, many by banks for their credit…
Umbrex is pleased to welcome Kedar Gharpure with B2B Growth Consulting.  Kedar is a former McKinsey & Co. project manager with over 10 years experience in growth strategy, commercial transformation and digital at B2B companies across a variety of sectors globally. Kedar has supported both Fortune 250 and PE owned B2B companies across a range of sectors such as industrial goods, specialty chemicals, hi-tech and business servies to craft their growth strategy and drive sales and margin growth. He has…
  Barry Horwitz shares a post to help you define and improve your business model.  According to Mark Johnson, co-founder of Innosight, a business model is simply this: “The way a business creates and delivers value for a customer while also capturing value for itself in a repeatable way.” It’s a straightforward concept, but important enough that academics and consultants alike talk about it frequently. For example, in my work with entrepreneurs — both established and “would-be” (i.e., students at…
  Ian Tidswell and Norbert Paddags co-wrote this article on what bankers should learn about innovative pricing approaches to increase profitability. Pricing – What private bankers can learn from Porsche Banks have learned a lot from industries like the automotive sector in the past, but they still have some catching up to do. This includes innovative pricing approaches to increase profitability. Imagine you want to buy a sports car, for example a Porsche. Maybe a 911. You call a dealer…
  Robbie Kellman Baxter shares key points on developing tiered pricing options that elicit a positive reaction from subscription-based customers.  Netflix, one of the largest and most successful subscription companies in the world, has among the simplest of business models. There’s a one-time, short, free trial and then the only option is to subscribe.* They only offer a few subscription options, are very limited in the partnerships they utilize and generally stay away from bundling their products with those of…
Umbrex is pleased to welcome Sara Zanichelli. Sara has 10+ years of strategy consulting experience, as core member of Financial Services Practice at BCG and previously at Simon-Kucher & Partners (recognized as world leader in pricing consultancy). After BCG, she held managerial roles in ING Bank (innovative digital bank, agile pioneer), being responsible for customer value management (marketing, pricing, customer intelligence, complains) and later serving as tribe leader for lending products. Sara spent the last 6 months in Qatar, working…
  Eric Hiller recently published the first article in a series for Industry Week. This week, the article  focuses on how an executive (and other people who are not cost experts) can understand what the cost management team is communicating. We have all been in a meeting where miscommunication happens. One of the biggest challenges when dealing with analytics in business is that the more powerful the analytics, the harder it is to explain to other people not involved directly…
Umbrex is pleased to welcome Travis McElveen with Matterhorn Advisors. Travis McElveen spent nearly 4 years at McKinsey & Company in a variety of roles, including Engagement Manager, where he served companies in the transportation, aerospace, and basic materials industries across multiple functions, including operations, pricing, advanced analytics, and growth strategy.  Additionally, Travis has extensive experience serving organizations in the federal and non-profit sectors. After starting his career at McKinsey & Company as a Business Analyst, Travis joined the US…
  The Internet of Things has caused much disruption in the retail industry where only the most agile and innovative survive and thrive. Carlos Castelan’s company blog explains how to transform or build businesses to match customer expectations. There’s a great line courtesy of Albert Einstein where he was quoted as saying, ‘If I had an hour to solve a problem and my life depended on the solution, I would spend the first 55 minutes determining the proper question to…
  Ian Tidswell provides an infographic that provides the details of the key 6 steps to creating and capturing value in MedTech, from offer design through market access and reimbursement approval to new product transitions. Success in the Medical Technology industry requires constant innovation. However, capturing a fair share of the value (pricing) from that innovation throughout the product life cycle is especially challenging given multiple market access hurdles, constrained healthcare budgets and diverse stakeholders.   The steps illustrated include:…
  Pieter Lekkerkerk describes current alternative pricing models making inroads in car insurance in the US: pay-per-mile and driving-score based pricing.    In the last few decades car insurance premiums have traditionally been set based on o a risk assessment questionnaire (typically covering the car, its usage, the driver and her/his background among others), enriched with data from e.g., credit bureaus and the Department of Motor Vehicles (on e.g. traffic fines). In the wave that saw the disruption of many…
Jason George tackles the intricacies of tariffs and taxes and discusses the potential of a fair system that takes into account concentrated benefits and diffuse costs while dealing with the interests of the few vs. the masses. Observers who dig even a little into government policy in areas like tariffs or taxes might note some peculiar features. Regulations are often crafted to provide benefits to a favored constituency, while the corresponding costs are borne by the broader population in some…