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B2B STRATEGIES
The best B2B pricing strategies are simple and easy to explain.
Four basic strategies are usually all you need.
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Focus on repricing existing business: The only way to deliver significant pricing results in the short-term if less than 20% of sales are new each year.
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If a customer shrinks, raise prices: This is the inverse of reducing prices when a customer grows. Look at trends over a few years, customers and SKUs.
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When material costs increase, raise prices: Sales people are most comfortable with a cost-based rationale for price increases. Differentiate the amount of price change by SKU if you're really good.
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Take negative margin SKUs to 15%+ variable margin: Don't subsidize customers to hold onto unprofitable revenue. For high-margin customers with a few bad SKUs, give them up to a year to find another supplier. In the end, you'll keep all or most of the volume with big profit gains.
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While the strategies are simple, it's difficult to change
historical practices and execute consistently
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