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    Pricing

    Pricing advisory is setting what a company charges using its cost structure, its customers' willingness to pay and its competitive position, then choosing the model it invoices under.

    If you get three different answers, you do not have a price list. You have a suggestion. (read where we wrote it)

    In Growth Strategy: Deepen the Core

    Mainly for

    4Parts to one price: target, cost, strategy and model

    Why does the number come last?

    Most pricing conversations start with what to charge. That number comes last. It rests on a floor, a test with real buyers, and a way of charging that is hard to change later.

    The bigger the circle, the more pricing work succeeds or fails there.

    1. Evidence

      Your own contracts, the deals you won and lost and why, and the costs already in your FP&A model.

      The pocket price waterfall

    2. The floor

      The price below which a deal loses money, per product and segment, written down and known by everyone who quotes.

      Pricing Maturity AssessmentWhich margin to discount against

    3. Target

      What buyers will pay, tested with the buyers themselves rather than read off a rival's price list.

      Price discovery

    4. Model

      What you charge per: a seat, a transaction, a month or a result. It is harder to change later than the price itself.

      What you charge per

    5. Discount rules

      Who may approve how deep a discount, and what you get in return, written down before the first negotiation.

      The discount breakeven table

    6. The change

      Existing customers, contracts and the sales team each need their own version. Most pricing work fails here, not in the analysis.

      Raising prices

    What changed once a price was built from the numbers?

    One engagement, named with the client's consent: training batches priced around break-even enrolment, with a model and a budget behind them.

    Which four parts make up a price?

    The price buyers will pay, the cost it has to cover, the strategy, and the model you charge by.

    How we work

    At 20% contribution margin, a 10% discount requires you to double your business to be no better and no worse off than before you gave it.

    Sriram Chidambaram, in The discount breakeven table every salesperson should carry

    Where next in Pricing?

    Pricing pages

    • How we workHow a price is set, from the floor up

      We start from the lowest price your costs allow and test what buyers will pay. Then we choose the unit you charge for, and plan how the change reaches customers and the sales team.

    • InsightsInsights on pricing

      Our team writes about the price a company keeps, which is rarely the one on the invoice.