Pricing Strategy from a customer perspective

In the article Pricing Strategy Defined in Three Questions, Wiglaf Journal editor Tim J. Smith writes about pricing strategy in its simplest form.

To get pricing strategy right, answering a few simple questions from the customers perspective is a great start:

1. What is the alternative?
2. Are you better or worse?
3. What’s in it for the customer

1. Customers always have alternatives, they can keep doing what they are currently doing, they can buy a competitors product or they can buy a substituting product from an indirect competitor. The challenge is to understand the value in use of what you are selling.

2.  Offering a solution with a lowest total cost allows for pricing at a better margin, as does a unique solution that is differentiated from the competitors.

3. It is not enough to have the best solution and a competitive price, the customer also has to agree with you. This is where market communication can help. On- going education and information about product offerings, like case studies, application examples, testimonials or references provide familiarity and reduce apprehension about testing or purchasing.

At the end of the day, a company with a strong brand and a good reputation has a better opportunity to set price, than a company with shoddy products and uneven reputation. A big part of sales psychology is to help the customer find peace of mind. If companies do this right, then there will be repeat business, and the discussion will be a lot less about price.

(link to the article: http://www.wiglafjournal.com/pricing/2012/03/pricing-strategy-defined-in-three-questions-2/?preview=1&template=Wiglaf&stylesheet=Wiglaf)

Co-marketing of Construction Services to Build Business: Royal Floridian Resort Renovation

ConTech Restoration is a regional construction company based in Central Florida, specializing in concrete work. Given current economic conditions, there are not a lot of new construction projects in the area. The management challenge is to find a way to use idle capacity, where they can still leverage their competitive  strengths:

• concrete know- how
• effective project management
• a highly collaborative approach

The solution is to focus on concrete renovation projects. In Florida there are many hotels, condos, timeshares, parking garages and similar structures experiencing weathering and damage. Since the building replacement cycle is slow with limited financing, owners and managers are interested in renovation and refurbishment as ways of protecting their property investments.

In their market, ConTech is well known for a collaborative approach involving all project stakeholders, resulting in beautifully restored buildings done on budget and meeting aggressive schedules. 



Being a small company, ConTech is using a specific job in Daytona Beach, the Royal Floridian renovation, as an opportunity to pool their marketing resources with other companies, for greater reach and resonance. This Daytona Beach landmark, owned by Spinnaker Resorts, will receive new balconies, windows, doors and added coatings at a cost that is a fraction of new construction.

Partners in this joint marketing effort (http://www.contechrestoration.com/concreterestoration/) are:

• BASF, providing coating solutions for everything from foundation to exposed balconies, concrete repair, waterproofing, corrosion mitigation and moisture protection
• RSC Equipment Rental, supplying lifts, jackhammers, compressors and other construction equipment
• CEMEX, providing the concrete

So why is this joint marketing effort innovative and interesting?  

1. The project is brought to life in successive videos by recognized documentary film maker George Billard, showing tasks, approach and advantages in a very effective and aesthetic way. http://www.contechrestoration.com/concreterestoration/multimedia/video
2. The beauty of this effort is how the interests of large and small co-suppliers intersect: ConTech can attract new customers up and down the East Coast, outside their core market. RSC with a national scope can get rental business from other construction companies doing refurbishment work. Finally, the multinationals BASF and CEMEX have an opportunity to further consolidate their brands, and show nimbleness and agility to their global audiences

Gentlemen, start your jackhammers!