Issue link: http://psai.uberflip.com/i/870386
W EEKLY EDITION SEPT 6, 2017 Improving Your Pricing Strategy ...continued Based on an article by Nigel Hollis and adapted for the PSAI With the ever - present imperative to grow sales, giving way to customer pressure to discount your brand is tempting. However, as Nigel Hollis outlined in his article, "Command A Price Premium For Profitable Growth," doing so undermines short - term profits and threatens the company's long - term viability. So how do you grow your customer base and grow sales without diluting profit ? Smart business leaders figure out ways to command a price premium. Strategies that help grow premium perceptions Research consistently finds that a company can only justify a price premium if it is seen to be meaningfully different from the alternatives. Creating a perception of difference may seem difficult in today's competitive environment, yet experts find that four out of 10 brands around the world manage to differentiate themselves to a significant degree. To create that all - important perception of difference, you need to answer three questions: 1. Who values your brand the most? Not every decision maker is price - sensitive – or price sensitive to the same degree as others. Price sensitivity also differs by segment, category, and country. So, for example, decision makers seeking portable restroom trailers for VIP events in California will likely not have the same degree of price sensitivity as a general contractor seeking portable restrooms for a hotel/casino project in New Jersey. How imp ortant your category (e.g., restrooms, trailers, hand wash stations, fencing, etc.) is to people will determine how generally price - sensitive they are, but even buyers within the same category segments will value brands differently. Few will be totally pri ce - driven – even if they say they are. It is your job to figure out how to make your brand valuable enough to reduce the attraction of cheaper alternatives . To do so, you need to identify which type of customer makes you the most money and focus on them. Remember — it is really difficult to be all things to all people. For instance, when it comes to air travel, pleasure travellers are likely to be more price - sensitive than business travellers, particularly on short - haul flights. For example, both Ryanair in Europe and Spirit Airlines in the US have created a strong business founded on a reputation for cheap flights, but would find it hard to appeal to any but the most price - sensitive of business travellers because of the stripped down nature of the flying exp erience. PAGE 2 CONTINUE D ON PAGE 3