Avy Punwasee, a Partner at Revenue Management Labs, conducted a pricing benchmark survey in December 2023 with 520 executives across North America and Europe. The survey highlighted five best practices common among high-performing companies. These included C-Suite Engagement in Pricing Decisions, Monthly Review and Monitor of Pricing Decisions, Enablement of Go-To-Market Team through Clear Discounting Guidelines, Dedication of a Team to Pricing, and a Balanced Approach to Pricing Decisions.
The survey revealed that companies with C-Suite involvement in pricing decisions saw higher pricing targets, realization of targets, and less discounting. Monthly pricing reviews were also shown to result in increased revenue growth and gross margin. However, only 12.5% of respondents had a monthly review process in place, suggesting an opportunity for operational change to maximize revenue growth.
Having clear discounting guidelines can empower sales teams to make pricing decisions without needing approvals, leading to higher revenue growth increases. Likewise, companies with a dedicated pricing team consistently beat revenue growth and price increase targets. It was also noted that a balanced approach to pricing decisions, considering customer value, market dynamics, and financial outcomes, resulted in twice the net price increase compared to companies that did not use a balanced approach.
The importance of prioritizing the pricing function with dedicated resources and input from key senior leadership was highlighted as crucial for maximizing profitability and market competitiveness. Pricing plays a pivotal role in determining profitability and market competitiveness, and high-performing companies continuously refine their pricing practices to drive value and revenue. While the survey identified key pricing practices distinguishing top-tier companies, establishing foundational pricing capabilities was recommended as a starting point for businesses looking to enhance their pricing strategies.
Forbes Business Council is a prominent growth and networking organization for business owners and leaders. Businesses can apply to join the council to access resources, networking opportunities, and grow their business. Avy Punwasee’s survey highlighted key pricing practices that can help companies maximize profits and remain competitive in the market. By implementing these best practices, businesses can improve their pricing strategies and drive revenue growth.
