Many business-to-business companies have a major opportunity to improve their standing on price. Bain & Company conducted a global survey of senior executives at more than 1,700 companies to gather their self-rating of 42 pricing capabilities and outcomes. Our analysis shows that top-performing firms, as measured by strong outcomes and increased market share, are more likely than their peers to do three things:
- Employ truly tailored pricing at the individual customer and product level
- Align incentives for frontline sales staff with the pricing strategy, encouraging prudent pricing through an appropriate balance of fixed and variable compensation
- Invest in ongoing development of capabilities among the sales and pricing teams through training and tools
The payoff: Among the companies that excel in all three areas, 78% are top performers, vs. just 18% of companies that excel in none of the three.
Ron Kermisch and David Burns are partners with Bain & Company’s Customer Strategy & Marketing practice. Kermisch is a leader of Bain’s pricing work, and Burns is an expert in building pricing capabilities. They are based, respectively, in Boston and Chicago.
How the best B2B companies set and get the right price.
To start setting and getting the right price, executives at business-to-business companies can look to three areas where pricing leaders excel.