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How to break out of the cost-plus pricing trap
Many B2B companies still rely on cost-plus pricing. For good reason! It’s clear, it’s simple to explain and defend, and it’s predictable.
But when buyers use it as an excuse to call you a commodity and demand discounts, it can lead to extremely thin margins and dilute your pricing power.
In this episode, Tracy Dent and Jeet Mukherjee discuss five levers to escape the cost-plus pricing trap without blowing up your commercial model.
Key topics covered:
- The basics in quantifying differential value and understanding quality of revenue
- How to differentiate beyond the product itself
- Ways to reevaluate your price metric to be outcome-specific
- How to protect resources and assets in a scarce market
- How to build rules to price with confidence and reward the right customer behaviors
If your commercial team struggles to defend pricing in the face of buyer pressure, this episode will help you start making the shift one step at a time.
Chapters
00:00 Introductions
01:32 Why cost plus pricing still dominates
06:05 When buyers call you a commodity
11:45 Handling price negotiations at the time of renewal
19:39 Reframing price from SKUs to outcomes
22:38 Understanding your quality of revenue
25:49 Rules-based pricing that reflects value
https://holdenadvisors.com/how-to-break-out-of-the-cost-plus-pricing-trap/
Connect with Jeet: https://www.linkedin.com/in/jeet-mukherjee-58462a1/
Connect with Tracy: https://www.linkedin.com/in/tracyleighdent/
ABOUT HOLDEN ADVISORS
Holden Advisors is a boutique consulting firm specializing in B2B pricing and sales performance. We help companies understand their value through the eyes of their customers and use these insights to develop, price, and sell solutions that meet evolving market demands.
Our tailored strategies are designed to improve differential value and go-to-market execution. With decades of expertise in value-based pricing, sales implementation, and negotiation, we partner with companies to build and protect their pricing power.
Learn more at www.holdenadvisors.com
View all episodes
By Holden AdvisorsMany B2B companies still rely on cost-plus pricing. For good reason! It’s clear, it’s simple to explain and defend, and it’s predictable.
But when buyers use it as an excuse to call you a commodity and demand discounts, it can lead to extremely thin margins and dilute your pricing power.
In this episode, Tracy Dent and Jeet Mukherjee discuss five levers to escape the cost-plus pricing trap without blowing up your commercial model.
Key topics covered:
- The basics in quantifying differential value and understanding quality of revenue
- How to differentiate beyond the product itself
- Ways to reevaluate your price metric to be outcome-specific
- How to protect resources and assets in a scarce market
- How to build rules to price with confidence and reward the right customer behaviors
If your commercial team struggles to defend pricing in the face of buyer pressure, this episode will help you start making the shift one step at a time.
Chapters
00:00 Introductions
01:32 Why cost plus pricing still dominates
06:05 When buyers call you a commodity
11:45 Handling price negotiations at the time of renewal
19:39 Reframing price from SKUs to outcomes
22:38 Understanding your quality of revenue
25:49 Rules-based pricing that reflects value
https://holdenadvisors.com/how-to-break-out-of-the-cost-plus-pricing-trap/
Connect with Jeet: https://www.linkedin.com/in/jeet-mukherjee-58462a1/
Connect with Tracy: https://www.linkedin.com/in/tracyleighdent/
ABOUT HOLDEN ADVISORS
Holden Advisors is a boutique consulting firm specializing in B2B pricing and sales performance. We help companies understand their value through the eyes of their customers and use these insights to develop, price, and sell solutions that meet evolving market demands.
Our tailored strategies are designed to improve differential value and go-to-market execution. With decades of expertise in value-based pricing, sales implementation, and negotiation, we partner with companies to build and protect their pricing power.
Learn more at www.holdenadvisors.com