How to communicate price corrections?
The Pricing Blog
by ahmet.giray@yahoo.com
3M ago
Imagine your first month the job as the pricing manager. You discover lots of price inconsistencies, negative-margin prices etc. that should be fixed. Great job! Lot’s of margin improvement opportunities there! But how will you communicate this to a customer, without sounding like “here we increased your prices because we noted they were too low”? I often found the “communication of non-regular price updates” a friction point between the pricing team and the sales team. This can even lead to block the margin-improvement project, despite the fact that they are reasonable and justified from an i ..read more
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Navigating the Supermarket Shuffle: Is Inflation Impacting Your Grocery Bill?
The Pricing Blog
by ahmet.giray@yahoo.com
4M ago
This blog post is the re-written copy of my previous blog post, using ChatGPT. I wanted to test if the improved writing style also brings more traffic to this page in comparison to the original post. Ever wondered if your supermarket loyalty is costing you more than you realize? I recently took a deep dive into my shopping habits at Delhaize, and the results were eye-opening. Let me share the journey with you, and why it might be time to reconsider where you stock up on groceries. ? The Inflation Conundrum: In a world where inflation is making headlines, the supermarket aisle isn’t exempt. Rep ..read more
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How to calculate product mix impact on profitability?
The Pricing Blog
by ahmet.giray@yahoo.com
9M ago
How does profitability change even if the revenue and cost stay stable? Product (or customer) mix might be the answer. In this post we will explain what product mix is and how to calculate its impact on the profitability. Let’s start very simple. Imagine your business have two products – a simple one and a premium one:   Basic Product Premium Product Cost $ 10 $ 20 Average Selling Price $ 20 $ 50 Gross Margin $ $ 10 $ 30 Gross Margin % 50% %60 Let’s also assume that there is only 1 customer to remove the “customer mix impact” from the calculation (we will review this in anot ..read more
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How to build a revenue bridge on large datasets?
The Pricing Blog
by ahmet.giray@yahoo.com
1y ago
We explain what a revenue bridge is, how it can be used, and how to prepare one on large invoice datasets using MSSQL. A revenue bridge is a financial analysis that bridges previous year’s revenue to current year’s revenue. In doing so, it goes one step at a time, so that the reader can understand the factors impacted the revenue variation between the two years. In this post, we will do a simple revenue analysis with most common factors. Depending on the business you are analyzing you can add more factors to the bridge (we will tell more if this at the end). In most simple terms, the change of ..read more
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Automate your work – easily split large price lists!
The Pricing Blog
by ahmet.giray@yahoo.com
1y ago
When you work on ERP price lists, you end up with thousands of lines of price list – SKU combinations. When sending these files to review, you need to filter and save as tens of files. How to automate this? If your company is not using a price-management suite, the annual price review is a hell of a manual work to do. I know it, I have done if 5+ times already. You have to do, correct, and re-do many reports tens of times. It really wears you out. One of the most time-taking tasks of the annual-price review, I find, is to split the long price agreement file into one-file-per-reviewer, send the ..read more
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Daily pricing terminology
The Pricing Blog
by ahmet.giray@yahoo.com
1y ago
Definitions and explanations of the long list of jargon and notions used in pricing. Which price ? which cost? what is that analysis? Here we explain basics on pricing terminology. It is important to know what price you are talking about as a data point – misunderstanding this might totally drive your analysis out of path and lead you to incorrect results. I list below the items that come up often when we discuss pricing analysis. Revenue / Price side: List price / Public Price: This is usually what you expect an end-user to pay. For example, imagine you went to a locksmith to buy a new set of ..read more
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Scan your portfolio for discount outliers
The Pricing Blog
by ahmet.giray@yahoo.com
1y ago
You set price lists and discount levels – larger accounts get larger discounts. But do they? We provide you with SQL queries to analyze sales and find outliers. As explained in this precisionlender website, “price Getting covers people and process issues, but it essentially boils down to one question. How good are we at actually booking that price after we set it?”. Pricing leaks may occur by design (price setting), or during execution (price getting). I noticed that quite a lot of time pricing managers assume that working on the rules make the difference, but they do not create a feedback mec ..read more
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How to legally collect B2B competitor pricing in 2022?
The Pricing Blog
by ahmet.giray@yahoo.com
1y ago
It is critical to have an idea of competitor landscape, but we have to watch for not conducting an illegal and/or unethical behavior looking for competitor pricing. You can see a good summary of what you can and what you cannot do in this blog post, and many other resources. I would like to add to the list of alternative sources for B2B competitor pricing in the new era of eCommerce and e-marketing: Newsletters: Go and subscribe to the newsletters of your competitors. You do not need to disguise your identity, use your professional email address and register on their website as a visitor. Many ..read more
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Book review: Pricing Strategy (Tim J. Smith)
The Pricing Blog
by ahmet.giray@yahoo.com
1y ago
In this post, I review the book “Pricing Strategy: Setting Price Levels, Managing Price Discounts and Establishing Price Structures” by Tim J. Smith. In many of the blogs, I see reviews of strategic pricing books, usually digging down on a single concept or explaining a new perspective. Since thepricingblog.com is an execution-oriented blog, I picked my favorite pricing book – a text book! And also, for a change, instead of giving you a summary of the book you can buy and read yourself, I will try to explain how I used the concepts in this book in my experience as a pricing professional. The P ..read more
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Average vs Median Price – how to avoid the trap?
The Pricing Blog
by ahmet.giray@yahoo.com
1y ago
Running a profitability analysis based on average price is quick and easy – but does it give the full picture? I explain why and how to compare average price with median price, and take insightful pricing decisions. As a pricing professional, I am sure you have run regular profitability reviews based on average prices. In the end the calculation is very easy – total sales divided by total quantity gives you the average selling price, then you compare it to the standard cost, and you have your profitability. However, taking a price increase decision solely based on the profitability calculated ..read more
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