PRICING EXCELLENCE

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P R I C I N G B R E W R E S E A R C H R E P O R T
PricingBrew Research and Analysis Exploring the
Practices and Capabilities That Are Setting New Standards
for Pricing Excellence in B2B Environments
THE BENCHMARKS FOR
NEW
While the economy continues
to suffer from uncertainty about
the future, there are two trends
that leave little doubt...
As the heroes of the downturn,
procurement teams are being
asked to aim for even higher
savings targets moving forward.
At the same time, 78% of sales
teams are reporting that their
quotas have increased, with
only 24% being very confident
they can actually achieve them.
So...empowered buyers are
pushing for more savings while
nervous sellers are pushing for
more sales...and your margins
are caught in the middle.
Intense Pressure
Is the New Normal
Most B2B companies are reporting
that pricing pressure is on the rise...
and its only going to get worse.
SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies
Copyright MindBrew May not be used or reproduced without permission.
65%
35%
Increasing The Same Decreasing
In many sectors, a few points of
margin are all that separate the
winners from the losers.
To capture those points, more
companies than ever before are
taking steps to enhance their
pricing and quoting capabilities.
And contrary to conventional
wisdom, this push for improved
pricing capabilities isnt limited
to large, multinational firms.
In a recent study across 19 B2B
sectors, over 35% of established
pricing functions were found in
companies of less than $1B.
So if youre just getting started,
you could already be behind.

Falling Behind Is
Just Not An Option
SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies
Copyright MindBrew May not be used or reproduced without permission.
In todays climate, winning business
at even just slightly higher margins
than the competition can provide a
game-changing advantage.
In general, B2B companies are
very insular and understandably
secretive about their pricing
and quoting capabilities.
Our studies show that they will
rarely look outside of their own
company, let alone their own
industry, for information and
education about pricing.
And youll never see a company
issuing a press release detailing
the new pricing capabilities that
helped them capture 7.5% more
margin without losing volume.
So, how do know where you
stand in the pricing capabilities
race? How do you know if youre
even on the right track?

Knowing Where
You Stand Is Tough
SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies
Copyright MindBrew May not be used or reproduced without permission.
Companies with advanced pricing
capabilities are loathe to talk publicly
for fear of losing the competitive
advantage they have developed.
PricingBrew interacts with tens
of thousands of B2B companies
across a variety of industries.
The surveys and confidential
interviews we conduct provide
unique visibility into the most
effective B2B pricing practices
and capabilities---even those
that arent discussed publicly.
Through our research, weve
identified ten areas where best
practices have been redefined;
setting new benchmarks for
pricing excellence in B2B.
Using this report to assess your
own capabilities, you can finally
see where you stand...and what
it will take to catch up.
Use This Report As
a Self-Assessment
SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies
Copyright MindBrew May not be used or reproduced without permission.
Does your company employ the ten
pricing capabilities and practices that
have become the new benchmarks for
true pricing excellence in B2B?
Some companies assume their
prices are accurate and that the
problem is inefficient workflows
and approval processes.
The leaders know that onerous
processes are often the result of
putting inaccurate prices into
the market in the first place.
They recognize that the largest
gains come from having better
prices, rather than moving bad
prices around more efficiently.
As such, they focus much more
attention on enhancing their
capabilities in the areas of new
product pricing, list and matrix
price-setting, and deal pricing
and negotiation.
SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies
Copyright MindBrew May not be used or reproduced without permission.
Leading companies understand the
big difference between efficiency and
effectiveness, and they focus more
attention on the quality and accuracy
of the price-points themselves.
SELF- ASSESSMENT QUESTI ONS
Have those who are setting or negotiating prices
received training in sound pricing practices? Or are
they just expected to intuitively know what to do?
Are your efforts focused on improving the price-points
themselves? Or are they primarily focused on process
steps, turnaround times, and enforcement?
Are your prices based on value-to-the-customer and
willingness-to-pay? Or are they simply a markup over
cost or competitive price-matches?
O IMPROVEMENT FOCUS
For pricing purposes, some
companies will use simplistic
segmentation models, or even
models that were designed for a
different purpose altogether.
Leaders recognize the power in
true price segmentation models
based on actual buyer behavior.
They develop segmentations
that reflect the dynamics of the
marketplace---i.e. where and
when customers are actually
willing to pay more, or pay less.
And because more segments
equate to more pricing power,
these companies strive for as
much granularity as possible in
their segmentation models.
O PRICE SEGMENTATION
SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies
Copyright MindBrew May not be used or reproduced without permission.
SELF- ASSESSMENT QUESTI ONS
Do you have an real, purpose-built price segmentation
model? Or are you using a customer, market or product
segmentation designed for a different purpose?
Does your price segmentation reflect where customers
are willing to pay different prices? Or is it designed
around where you want to charge different prices?
Is your price segmentation as granular and diverse as
the market you operate in? Or do you have a model with
a relatively small number of pricing segments?
Leading companies recognize that
real and robust price segmentation is
a foundational element that can
determine the effectiveness of nearly
every other pricing-related activity.
Most companies set prices
based solely on internal and
competitive factors. And they
put prices into the market with
little or no understanding of
how the market will respond.
For the leaders in this area,
understanding and measuring
price response is crucial.
They take steps to model the
variability in the market and
accurately measure segment-
specific willingness-to-pay and
win-rate elasticity.
In doing so, they significantly
reduce their price-setting risks,
while enhancing their ability to
achieve their objectives.
O MARKET RESPONSE
SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies
Copyright MindBrew May not be used or reproduced without permission.
SELF- ASSESSMENT QUESTI ONS
Are you currently measuring win-rate elasticity at a
price-segment level? Or are you simply monitoring
margins and discount rates?
Can you accurately predict what will happen to your
revenues and margins when you change prices? Or are
the impacts an after-the-fact surprise?
Can you accurately identify the specific price-points
that will achieve your revenue and profit goals? Or are
you simply responding to cost and competitive moves?
Leading companies are not content to
put prices into the marketplace and
just hope that things work out. They
measure price response and use it to
set better prices with far less risk.
For pricing analysis and price
setting, many organizations rely
heavily on human analysts. As a
result, skills and man-hours are
a constraint on the quality and
timeliness of pricing decisions.
Leaders are using predictive
analytics technologies that can
analyze the data, test various
scenarios, and recommend the
optimal actions---faster and
more accurately than human
analysts could ever hope to.
These smart technologies are
enabling these companies to
lend sophisticated, expert-level
pricing analysis to many more
pricing decisions across their
enterprises.
O PRICING TECHNOLOGY
SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies
Copyright MindBrew May not be used or reproduced without permission.
SELF- ASSESSMENT QUESTI ONS
Are you currently leveraging pricing technologies in
your business? Or is the addition of more human
resources your primary scaling mechanism?
Do you make use of smart technologies that can
recommend optimal prices automatically? Or are your
prices typically determined by human analysts?
Are the vast majority of your pricing decisions based on
deep and rigorous analysis? Or is rigorous analysis only
performed on high-runners and large deals?
Leaders recognize that pricing
technology can do much more than
automate workflows and visualize
data. It can also lend scale, speed,
and accuracy to pricing analyses.
In the quest for improved
pricing, companies will often
push pricing data and analytics
out to the broader sales force.
But the leaders know that most
salespeople are not analytically
inclined. If they were, theyd be
in a different line of work.
Instead of expecting their sales
team to become analysts, these
companies preprocess the
data to deliver the answers that
salespeople really need.
And theyre finding that this
prescriptive guidance, relevant
to the deal at hand, maximizes
consumption and utilization for
decision-making in the field.
O SALES FORCE GUIDANCE
SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies
Copyright MindBrew May not be used or reproduced without permission.
SELF- ASSESSMENT QUESTI ONS
Do you deliver pricing guidance or recommendations to
your salespeople? Or are they expected to intuitively
know what prices and discounts are appropriate?
Are you delivering prescriptive guidance and answers?
Or are you providing access to the data and expecting
salespeople to slice-and-dice on their own?
Do you deliver guidance through systems and processes
your sales team is already using? Or do you expect your
salespeople to log-in to new and different systems?
Leading companies realize that B2B
salespeople have neither the time nor
the aptitude for data analysis. So they
take things a step further and strive
to actually deliver the answers.
Most B2B companies measure
and incentivize salespeople on
the basis of top-line revenue.
Leaders understand how this
guarantees over-discounting as
salespeople quickly realize that
margin-killing discounts have
very little effect on their wallet,
but may make it easier to secure
the much larger pile of revenue
dollars that do. After all, every
revenue dollar contributes to
quota---profitable or not.
The leaders in this area measure
their salespeople on pricing
performance and include price
attainment metrics in their
incentive compensation plans.
O SALES FORCE METRICS
SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies
Copyright MindBrew May not be used or reproduced without permission.
SELF- ASSESSMENT QUESTI ONS
Does your sales team have guidelines and limits with
respect to discounting? Or do they have full discretion
to discount as long as they dont go below cost?
Do you measure your sales teams performance when it
comes to pricing and discounting? Or do you simply
track the amount of revenue theyve brought in?
Are your salespeople rewarded for holding the line on
prices and discounts? Or are revenue dollars the only
thing they are actually paid to care about?
Recognizing that the behavior of the
salesforce is dictated by how they are
measured and compensated, leading
companies align sales incentives and
metrics to desired pricing outcomes.
Companies often assume that
centralized control over any and
all pricing decisions is required
in order to drive improvement.
This is very painful from an
organizational perspective and
it can actually work against the
goals of greater relevance and
timeliness in pricing decisions.
Leaders in this area are building
Centers of Excellence around
pricing, a model which provides
oversight and promotes cross-
functional collaboration.
Pricing expertise is distributed
and overall pricing capabilities
are increased, while avoiding
much of the conflict.
O PRICING GOVERNANCE
SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies
Copyright MindBrew May not be used or reproduced without permission.
SELF- ASSESSMENT QUESTI ONS
Is your objective to develop more effective and efficient
pricing capabilities inside your company? Or is your
primary aim to establish a pricing department?
Are you distributing pricing education and knowledge
throughout your organization? Or is pricing expertise
bottled-up in a single department?
Do you have a pricing governance team that involves
other stakeholder groups? Or is pricing a functional silo,
with little collaboration and frequent conflict?
Leading companies understand that
centralized command and control is
not the only option, and theyre using
organizational models that distribute
expertise and promote collaboration.
For pricing improvement, many
companies will focus most of
their attention on the pricing
and discounting decisions that
are being made at a deal level,
on a daily basis.
While deal-level decisions are
clearly important, the leaders
understand that the decisions
with the greatest influence on
margins are taking place ahead
of the transaction...and much
further upstream.
As a result, these companies are
also enhancing their strategic
pricing capabilities in the early
stages of product development
and go-to-market planning.
O DEPTH OF COVERAGE
SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies
Copyright MindBrew May not be used or reproduced without permission.
SELF- ASSESSMENT QUESTI ONS
Have those involved in product or offering development
received training in strategic pricing? Or is knowledge
of these processes and practices just assumed?
Are strategic pricing considerations an integral part of
your go-to-market plans? Or is price-positioning and
pricing structure usually an afterthought?
Do your product and marketing teams identify and
quantify differential value-to-the-customer as a matter
of course? Or do they simply rely on intuition?
Recognizing that many of the most
impactful pricing decisions are being
made well in advance of the market,
leading companies are also focusing
on the strategic aspects of pricing.
Companies often believe that
the pricing capabilities they are
developing will only ever apply
to pricing and discounting.
But the leaders in this area
realize that what theyre really
developing is an analytical and
data-driven decision-making
capability---one that can be
used to inform a number of
profitable sales decisions.
In addition to delivering pricing
guidance, these companies use
their analytical capabilities to
improve prospect targeting,
identify customer defections,
and prioritize specific account
expansion opportunities.
O BREADTH OF COVERAGE
SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies
Copyright MindBrew May not be used or reproduced without permission.
SELF- ASSESSMENT QUESTI ONS
Are pricing decisions the only decisions sales needs help
with? Or are they also struggling to find new prospects
while growing and retaining their existing accounts?
Are you leveraging data to inform profitable decisions
beyond pricing? Or is all the data youve pulled together
only being looked at in one way, for one purpose?
Do your analysts know how to use data and models to
answer other questions? Or are their skills limited to the
area of pricing and discounting?
As pricing is just one decision among
a number of interconnected sales and
marketing decisions, the leaders are
applying their analytical capabilities
to other powerful profit drivers.
Most organizations---in B2B or
anywhere else---tend to cling
to the status quo and resist any
and all change.
In their own unique ways, the
leaders in this area will all say
something to the effect of, If
nothing changes, than this is as
good as its going to get. And
thats not good enough.
They're driven to stay ahead of
competition. Theyre constantly
scanning the horizon, looking
for the next big improvement.
They're willing to test new
approaches and even fail on
occasion. Instead of resisting
change, they embrace it.
G INNOVATION & CHANGE
SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies
Copyright MindBrew May not be used or reproduced without permission.
SELF- ASSESSMENT QUESTI ONS
Are your pricing processes and practices constantly
evolving and improving? Or are they essentially the
same today as they were a decade ago?
Are you willing and able to try new approaches and test
new technologies? Or does just trying something new
and different a scary proposition?
Are you aware of pricing innovations outside of your
industry? Or do you assume that theres nothing to
learn, because other industries are different?
While most organizations will only
change if and when they are forced
to, leading companies stay ahead by
embracing innovation and the change
that inevitably comes along with it.
In this report, weve presented
new best practices in ten areas
of B2B pricing. Study each area.
Ask and answer the assessment
questions---objectively and
honestly. Identify the specific
areas where you can take your
practices to the next level.
Then, take action.
The vast majority will read this
report, nod their heads, and go
back to business as usual; never
taking a single step to improve
their pricing capabilities.
And that simple dynamic is
what separates those who set
the new standards from those
who just read about them.
Assess the Gaps
and Get On With It
SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies
Copyright MindBrew May not be used or reproduced without permission.
In any moment of decision, the
best thing you can do is the right
thing. The worst thing you can do
is nothing. - Teddy Roosevelt
- A range of B2B topics from
segmentation and analytics
to value-based pricing and
pricing technology.
- A variety of resources from
case studies and research
briefings to step-by-step
tutorials and video guides.
- Exclusive monthly webinars
on topics suggested by our
community of subscribers.
- Expert interviews with top
consultants and real-world
pricing practitioners whove
been there, done that.
- Training courses covering
value-based pricing, sales
force adoption, and strategic
pricing processes.
Best Practices and Research
for Profitable Pricing in B2B

Copyright MindBrew LLC May not be used or reproduced without permission.
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Youve got millions of prices,
volatile costs, and minimal
inuence on discounting.
How do you win back control?
LEARN MORE