More businesses seek short-term profits for long-term survival

As financial markets veer wildly around the globe, minute-by-minute, companies now struggle to maintain the cash reserves necessary to keep their doors open. However, options to do so are rapidly narrowing. Attracting sources of new venture capital can be a difficult task. Access to new credit is also equally difficult.

All of this makes the ability to pinpoint prices for goods and services that result in more robust profit margins – right now – all the more important. But a quick-fix approach to boosting sales may not be the ideal solution in the long run.

“When it comes to pricing, choosing strategy over tactics can be difficult,” says Per Högberg, a senior partner and founder of PriceGain. “Many companies manage their pricing on a deal-to-deal basis without a long-term objective. The deal may be won, but profit can be left on the table.”

With offices in Sweden, the United Kingdom and representatives in the United States, PriceGain is an international pricing consultancy that advises businesses on how to implement pricing strategies to maximize profit.

On November 14, Högberg will present ‘Building a Pricing Strategy with Short-Term Profit Improvements’ at the Professional Pricing Society's Annual Conference on European and Global Pricing, in Brussels, Belgium. He will describe how to balance tactical and strategic goals in pricing, as well as explain how to get the support strategies such as these need, from top management and from staff.

According to Högberg, companies must learn to look from an outside perspective, outside in, rather than primarily at internal factors and costs when developing successful pricing strategies. With the external view as the starting point, PriceGain has implemented pricing strategies that have improved profits by as much as 100 percent in some cases.

“A solid pricing strategy is the best lever for sustainable profit and provides the strong market position that’s needed to survive financial storms, “ confirms Högberg. “However, the management must be fully on board and drive the pricing strategy development. Many initiatives in pricing do not provide complete returns due to lack of top management support, communication, and a pragmatic approach to implementation.”