Revenue Growth and Revenue Control go hand-in hand. In organizations with many customers, products, price points, discount types or rebates, it is key to keep the net revenue under control. Net revenue being defined as Quantity * (Gross Price minus all discounts minus all off-invoice rebates minus all other monies flowing to the customer). If the company manages gross prices / list prices, but let's sales teams discount arbitrarily, then net revenue tends to tumble as discounts grow.
Together with our partners over at PriceBeam, we are holding an exciting webinar in 2 weeks time about how to use willingness-to-pay insights in the decision making process for marketing investments.
Our partners over at RevBeam wrote a great blog post today about how to make pricing the hero of an acquisition:
In some industries, if not most, prices have historically only been changed infrequently, but the emergence of Dynamic Pricing and the benefits it brings to sellers is changing that. Dynamic Pricing in itself is simply to update prices (more) frequently based on an underlying pricing model, in order to optimize prices in accordance with demand, competition, market conditions, customer willingness-to-pay and more.
Are you looking for someone to speak about pricing and profit optimization at an upcoming event? Get a Stratinis Executive to come and speak:
Don't forget: on June 7th we are organising a webinar about how dynamic pricing and machine learning can improve prices in e.g. E-Commerce, retail, and other industries with frequent price changes.
This is the first article in a series about Revenue Control.
Revenue in B2B is defined as Quantity multiplied by (Price minus on-invoice discounts minus off-invoice rebates). Historically, Revenue Management has been associated with industries such as airlines and hotels, but in reality all B2B companies can benefit tremendously from revenue management and optimization. Especially those companies who have complex businesses with many products, discount types or considerable off-invoice amounts granted to customers.
Dynamic Pricing models are used in e-commerce, retail and other industries where pricing, supply and demand might change frequently. Dynamic pricing involves taking a number of input factors and then output something, typically a price. The advantages are plenty, including:
In consumer goods, assessing a brand's health can be useful in many strategic discussions. Should you invest in the brand/business, should you milk it or should you even consider selling it? Even, what kind of marketing spend should you put behind in next year's budget? Pricing and consumers' willingness-to-pay can play a crucial part of the decision making in such situations.
Working dilligently with pricing can often yield superior profits, both for the company doing it but in case of Venture Capital / Private Equity also for the investor. Here are 7 things to consider as an investor: