Stock markets are undulating. Consumer spending power is plummeting. And even the most stable businesses are under pressure. But some companies are finding a way out of the stormy conditions that currently exist. How? By focusing on one of the most basic elements of any business: Pricing.
Göran Skugge, a PriceGain senior partner, will be in Miami at the end of October to speak at the annual Professional Pricing Society Conference and to students who attend the Global Entrepreneurship Centre at Florida International University. His presentation entitled “Pricing Based on the True Willingness to Pay’’ has advice that could prove invaluable for companies of all sizes.
PriceGain is an international pricing consultancy headquartered in Stockholm, Sweden that advises businesses on how to set prices for products and services in order to generate maximum profits.
“Pricing is a hidden profit booster that many companies simply overlook,” says Skugge, who has a Masters degree from Stanford University and a Ph.D from the Royal Institute of Technology in Stockholm. “It’s one of the most effective ways to steer a business out of difficulty, which makes it incredibly relevant today.”
The results are clear. A pricing model that PriceGain developed for a leading brewery achieved a gross profit increase of 21% for a segment of the beer industry that’s worth €500 million. One of Sweden’s biggest national newspapers realized an additional €10 million profit after implementing a regional pricing program suggested by PriceGain.
How does PriceGain do it? By analyzing competitors, sales channels, market trends, market segments, customer buying behavior and price elasticity, a comprehensive pricing strategy is arrived at. And after a customized strategy has been put in place, some of PriceGain’s clients have realized a profitability improvement of up to 100% – by adjusting average prices by as little as 2%.
And how is the firm doing for itself? After achieving a 170% jump in revenue during the third quarter of 2007, PriceGain boosted that by an additional 86% during the most recent quarter of this year.