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Use Pricing Strategies for Maximizing Revenue and Profit

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Best Price

Companies take a number of different approaches to establishing their pricing , but many wrongly assume that they have limited control on revenue and margin by using more effective pricing strategies. Businesses can implement different pricing strategies and tactics to maximize revenue and margin. Depending on the pricing models and business-specific circumstances, it may take some time to find the right balance. The key strategy is to enable your front-line sales team with the tools and insights needed to maintain optimal pricing.

Here are some tactics you might consider.

 

1. Segment Around Buyer Values to Drive Value Pricing

If you’re struggling to get a grip on your customers’ buyer values, you aren’t alone. Buyer values can fluctuate based on the market competition, market sensitivity to pricing, and other challenges. For companies that serve diversified markets, a one-size-fits-all approach can leave revenue opportunities untapped. Segmentation around buyer business impact and value offers the flexibility to manage pricing differently across different segments, adjusting for those markets where the underlying business value justifies premium pricing. When managed effectively, segmentation strategies can produce margin increases of 10 points, and sometimes more.

2. Pricing Decision Support

Sales representatives have a significant influence on revenue margin. In many cases, sales professionals might be pursuing volume over margin, and with poor pricing tools at their disposal, they likely give away revenue margin needlessly when adjustments to their discounting and other pricing actions might give them better guidance. Getting this right leads to improved margins for the sales reps as well as the business. Companies should be on the lookout for tools and resources that can help sales reps handle these pricing considerations.

3. Allocate Resources Towards Higher Margin Opportunities

Profit is always welcome of course, but some sales efforts will prove to be much more profitable to a company than others. Those marginally profitable segments may be turning over a net gain, but their consumption of resources could be taking away from other opportunities that offer greater pricing power and are even more profitable. Businesses should stratify their various segments by profitability and allocate resources to the most attractive segments.

4. Assess and Adapt

With these strategies in place, use observation and analysis to evaluate the success of new pricing strategies. By closely observing the effects, you will gain insights into what’s impacting revenue and margin performance and you can fine tune your strategies.

Ultimately, the market will be the main driver in determining pricing, yet leaders are recognizing the importance of using value-based segmentation, market research and decision support to inform and enable their pricing strategies.  Contact us if you need help in maximizing pricing impact.

 

3 Ways to Increase Website Conversion

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Revenizer mobile responsive web example

Getting a web visitor to take action is the main objective of any web page. Unfortunately, many businesses see still a website as a brochure and do not take into account the way that web usage has changed and what the real purpose is. They spend all their time on design and not enough on usability and website conversion optimization. Pretty is good but conversion grows a business.

1. Use of Strong Visuals

Images need to have a purpose not just be decoration. Derek Halpen at Social Triggers put together a great article on the effective use of images.

He pointed out the following potential reasons for using images.

-To show a key product or service feature

Derek points out how genius the image of Apple Air in the envelope is. Apple is selling the “thinness” feature and nail it with the image. If you are selling a service, a good graphic can explain your offer.

MacBook Air image example for web conversion

-To direct attention

Images can be used to direct the web visitor’s attention. Images of people looking at or pointing can emphasize a key headline or call-to-action like a sign up form.

-To build trust

Using pictures of real people involved in the business whether they are customers or team members builds trust. Derek points out that people want to deal with real people. Stock images just don’t cut it. Customer testimonials have a lot more credibility if they have an image of the customer with them.

Revenue Architects testimonial example

2. Get the Headline Right

Another key page element is the headline. Copyblogger found 8 out of 10 people read only the headline. The promise of the headline must be compelling enough to turn a browser into a reader and then a sign up. Copyblogger offer a 11 part course to help with this. You won’t get the headline right first time. Optimizely lets you to test different headlines (and images) with no coding required. Testing should be an ongoing process.

3. Be Mobile Friendly

The big movement right now is towards responsive design. This means that a web site will reconfigure to be usable for any device from laptop ti smart phone. Website builders from Virb to Wix and Squarespace now offer responsive solutions. Excellent responsive themes are available for WordPress.

Revenizer mobile responsive web exampleDespite this, only 6% of small business websites are mobile ready according to a recent survey. The same study calculated that the lack of mobile readiness is costing US small businesses $1T each year. Mobile is now 28% of all web traffic. 4 out of 5 of these visitors will leave a site if it is not mobile optimized.

Make sure your emails are mobile optimized also. 70% of users will delete an email if it does display well on their smartphone. 75% of users open emails on smart phones.

 

Looking for help with improving conversion. Contact us at Revenue Architects.

For more ideas, go to Revenizer for 400+ more tips on optimizing digital + real time stats on your marketing performance.

The article summary is below.

Revenizer web conversion tips