TechCrunch

Editor’s note: Per Sjofors is CEO of Stratinis.

Price strategy is emerging as a critical path for companies to increase their competitive advantage and bottom line. Many companies have spent years achieving gains through cost cutting, outsourcing, process re-engineering and adoption of innovative technologies. However, the incremental benefits from these important activities are diminishing, and companies need to look at other areas to improve their business results.

Today, companies are looking to serve well-defined market segments with specialized products, messages, product variants and services, and to earn superior profit margins while doing so. All too many companies, however, use simplistic pricing processes and cannot even identify their most profitable customers or customer segments. The following is a list of 10 of the most common mistakes companies make when pricing their products and services.

Mistake No. 1:
 Basing prices on costs, not customers’ perceptions of value.

Prices based on costs invariably lead to…

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