Pricing strategies serve as the bedrock upon which every thriving business is built. However, the true journey starts not when you’ve crafted your pricing strategy, but when you embark on its execution. The process of pricing implementation is a multifaceted endeavour, encompassing rigorous testing, comprehensive training, seamless rollout, and agile iteration. This demanding phase demands a fluid mindset, one that fosters continuous learning and adaptation.
Test: Validate the Strategy
Before you launch your pricing strategy, it’s essential to ensure it’s rock-solid and ready. Validation is the most critical part of this process. Your pricing strategy must be airtight before entering the market. Validation methods may include:
Back Testing
Back testing involves the assessment of historical data to evaluate how proposed price changes would have impacted a sample of clients in the past across a range of scenarios. This retrospective approach helps identify potential pitfalls and unanticipated challenges associated with altering pricing structures.
Pilot Programs & Real-world Feedback
Pilot programs entail testing price changes with a select group of customers or investors. This approach provides valuable real-world feedback and allows for the assessment of customer sentiment. Typically, this can involve offering new products or strategies to a limited group of clients to gauge their response and gather feedback.
For fintech companies, this is especially important as it provides an opportunity to get under the skin of how your customers use your product, what makes them tick and how to correct any potential issues – before it all goes live.
It may also be a good idea to conduct a customer survey to assess any initial reactions to price changes – it provides an opportunity to adapt to changing market conditions and ensures that pricing strategies remain competitive.
Training: Equip Your Team
Implementing a pricing strategy isn’t just about the model; it’s also about empowering your team to execute it effectively. This involves:
Revamp Sales and Marketing Training
Train your sales and marketing teams to communicate the value of your pricing changes effectively. They need to understand not only the approach but also the underlying strategy. Provide your teams with insights into how your value and pricing compare to competitors.
Develop objection-handling frameworks to address common objections that may arise due to pricing or packaging changes, and tailor training to different roles within your organisation. Each team may encounter objections in different contexts and should be equipped with relevant responses. Objection-handling frameworks should be dynamic and subject to continuous refinement based on evolving customer objections and wider market conditions.
Nail Customer Success
Ensure that your customer success teams are well-placed to emphasise the value/ROI the product brings to the customer. Focus on driving usage and delivering value to maintain customer satisfaction. These interactions should focus on understanding customer needs and helping them adapt to the new structure.
Establishing the success of your customer can be complex but once it’s understood properly, it can become a powerful tool. With this, you can start to get more meaningful insights, including tracking usage metrics to tailor conversations with clients and fine-tuning the onboarding process based on similar client’s needs.
Bespoke Account Plans
Create bespoke account plans, outlining strategies to optimise customer satisfaction to ensure that your most valuable clients remain loyal. These might be highest-value accounts, highest-potential accounts or those accounts with recent usage issues.
Conduct regular account reviews to discuss the customer’s goals and align your services with their evolving needs. These reviews should also address how the new pricing structure reflects the value/ROI delivered to the customer.
Discounting Guidelines
Establish clear discounting guidelines to prevent value leakage. Empower your teams to offer discounts within predefined corridors to maintain pricing consistency. Discounting is a useful tool to increase conversion, but it’s not the only solution. It should never undermine the existing pricing strategy but should help support sales teams.
Roll Out and Iterate
Once your pricing strategy is thoroughly tested and your team is prepared, it’s time to roll it out into the market. However, the work doesn’t stop there; continuous iteration is key:
Feedback Mechanisms
Set up mechanisms for prompt feedback collection during the initial launch phase. Encourage customers and internal teams to provide feedback on pricing changes and their impact.
KPI Tracking
Whilst tracking high-level metrics such as average ARR is important, it is equally as crucial to track KPIs that are tied to the pricing objective. For instance, consider monitoring KPIs such as Customer Lifetime Value, pipeline drop-off and churn rate. These granular metrics can provide a more comprehensive view of how pricing changes are impacting your bottom line – for even further depth, KPIs can be broken down into region and value segment.
Swift Evaluation for Fine-tuning
Evaluate the initial response to your rollout swiftly. Are you achieving the desired outcomes? Are there any unexpected challenges? Be prepared to constantly iterate your approach and reevaluate if necessary.
Identifying any unexpected challenges, such as client pushback or competitor reactions, is important. Being prepared to pivot and make adjustments nimbly is essential when market conditions can change rapidly and unexpectedly.
Then, based on feedback and performance data, make fine-tuned adjustments to your pricing strategy. This might involve tweaking pricing tiers, adjusting messaging, or revising discounting guidelines.
Implementing a pricing strategy is a dynamic and iterative process that requires careful planning and ongoing refinement. By testing, training, rolling out, and iterating, you can ensure that your pricing strategy remains effective and aligned with your business objectives.
Keep in mind that pricing is not a one-time task but an ongoing journey of learning and adaptation in response to changing market dynamics and customer needs.
