This document discusses various approaches to pricing, including cost-based pricing, market-based pricing, and value-based pricing. It notes that cost-based pricing ignores market factors and customer value, while market-based pricing can promote unhealthy competition. Value-based pricing allows setting higher prices for customers who receive more value and lower prices for low-value customers to expand market size. The document also discusses elements that influence a customer's willingness to pay, such as perceived value, and the importance of maintaining a relationship between price and value.
What is Data Mining?
The process of determining useful patterns and relationships in big data through algorithms, to extract knowledge from data warehouses.
Role of Data Mining in CRM:
1. Get a holistic view of customer life-cycle
2. More data will result in accurate models
3. Leverage forecasting and descriptive modeling techniques
4. Have a proactive approach with predictive analytics
How will Data Mining Benefit my Business?
1. Conduct Basket Analysis for better stocking, store layout, and promotion strategies
2. Sales Forecasting to optimize your sales, supply chain and financial management
3. Predictive Lifecycle Management for each customer to segment them accordingly
4. Optimal Allocation of company’s resources for enhanced productivity and better ROI
5. Product Customization by predicting features that meet the customer’s demands
6. Database Marketing for a defined target market, personalized campaigns, and promotional offers
7. Predict Warranty Claims by the customers and their average cost to have efficient management of funds
8. Fraud detection by analyzing past fraudulent transactions and taking corrective measures
Techniques of Data Mining in CRM
1. Clustering – Identify similar data sets and understand both similarities and differences in data to increase conversion rates
2. Classification – Gather all information about a data set and classify it into proper categories.
3. Anomaly Detection – Information that does not match the expected behavior or projected pattern, providing actionable information
4. Association Rule Learning – Uncover hidden patterns from the data to better understand your customer’s habits and predict their decisions
5. Regression – Find dependency between different data items and map out the effect of variables on each other. It helps in determining customer satisfaction levels and its impact on customer loyalty
Read our entire blog here: https://www.rolustech.com/blog/data-mining-crm
What is Data Mining?
The process of determining useful patterns and relationships in big data through algorithms, to extract knowledge from data warehouses.
Role of Data Mining in CRM:
1. Get a holistic view of customer life-cycle
2. More data will result in accurate models
3. Leverage forecasting and descriptive modeling techniques
4. Have a proactive approach with predictive analytics
How will Data Mining Benefit my Business?
1. Conduct Basket Analysis for better stocking, store layout, and promotion strategies
2. Sales Forecasting to optimize your sales, supply chain and financial management
3. Predictive Lifecycle Management for each customer to segment them accordingly
4. Optimal Allocation of company’s resources for enhanced productivity and better ROI
5. Product Customization by predicting features that meet the customer’s demands
6. Database Marketing for a defined target market, personalized campaigns, and promotional offers
7. Predict Warranty Claims by the customers and their average cost to have efficient management of funds
8. Fraud detection by analyzing past fraudulent transactions and taking corrective measures
Techniques of Data Mining in CRM
1. Clustering – Identify similar data sets and understand both similarities and differences in data to increase conversion rates
2. Classification – Gather all information about a data set and classify it into proper categories.
3. Anomaly Detection – Information that does not match the expected behavior or projected pattern, providing actionable information
4. Association Rule Learning – Uncover hidden patterns from the data to better understand your customer’s habits and predict their decisions
5. Regression – Find dependency between different data items and map out the effect of variables on each other. It helps in determining customer satisfaction levels and its impact on customer loyalty
Read our entire blog here: https://www.rolustech.com/blog/data-mining-crm
This presentation is designed for people who sell or market to retailers. It is also suitable for those who are new in a retail business such as management trainees, IT and finance teams.
Price will ALWAYS seem high if value is perceived as low!
Customers don’t want cheap, they want BEST Value for their dollar.
You will lose in long run when focus on price comes from:
Poor Product Knowledge
Poor Client Knowledge
Poor Sales Skills
Chapter 4 Creating Customer Value, Satisfaction, and LoyaltyNishant Agrawal
Creating Customer Value, Satisfaction, and Loyalty
Organizational Charts
What is Customer Perceived Value?
Determinants of Customer Perceived Value
Steps in a Customer Value Analysis
Measuring Satisfaction
What is Quality?
Chadwick Martin Bailey’s Brant Cruz and Jeff McKenna presented best practices of market segmentation based on their years of experience working with clients like eBay, Electronic Arts, Plantronics, and Microsoft.
Fundamentals and advanced concepts in customer segmentation. CLV (customer lifetime value) and specific implications in Telecoms. Approaches in operational deployment of customer segmentation.
This presentation gives an overview about the concept of Category Management in Retail. It covers topic such as Visual Merchandising, Planogram, CM in Grocery Store vs Apparel Store
This presentation is designed for people who sell or market to retailers. It is also suitable for those who are new in a retail business such as management trainees, IT and finance teams.
Price will ALWAYS seem high if value is perceived as low!
Customers don’t want cheap, they want BEST Value for their dollar.
You will lose in long run when focus on price comes from:
Poor Product Knowledge
Poor Client Knowledge
Poor Sales Skills
Chapter 4 Creating Customer Value, Satisfaction, and LoyaltyNishant Agrawal
Creating Customer Value, Satisfaction, and Loyalty
Organizational Charts
What is Customer Perceived Value?
Determinants of Customer Perceived Value
Steps in a Customer Value Analysis
Measuring Satisfaction
What is Quality?
Chadwick Martin Bailey’s Brant Cruz and Jeff McKenna presented best practices of market segmentation based on their years of experience working with clients like eBay, Electronic Arts, Plantronics, and Microsoft.
Fundamentals and advanced concepts in customer segmentation. CLV (customer lifetime value) and specific implications in Telecoms. Approaches in operational deployment of customer segmentation.
This presentation gives an overview about the concept of Category Management in Retail. It covers topic such as Visual Merchandising, Planogram, CM in Grocery Store vs Apparel Store
Survey conducted with 48 mid-sized business-to-business companies to validate changing landscape of B2B selling. Questions covered topics related to sales compensation, pricing, quoting and profitability.
This slide deck includes a set of tools I have used frequently over the last several years and a few new ones. Most are appropriate to B2B pricing but some may be useful in B2C companies. Some are very pricing specific and others more broadly applicable. Enjoy.
B2B Pricing: the how of sustainable improvementIan Tidswell
This presentation focused on the practical steps for how to improve pricing, looking at the skills needed, organizational design, the way to think about pricing automation, and pricing metrics approach. This can be read in conjunction with my other B2B pricing presentations posted around the same time.
Why is this book so important? One of the biggest lessons I have learned within the startup landscape is that even though pricing, together with the business model, remains by far the lever that most impacts revenue, the subject is a sensitive one.
Pricing is a strong — but often underused — tool available to capture a share of value created for customers
Pricing is one of the biggest challenges that startup face. The book is a practical toolkit that positively influences the pricing strategies of startups. It reveals insights in the different pricing methods and tactics used by successful companies.
Slack's Ali Rayl on Scaling Support for User GrowthHeavybit
In this Heavybit Speaker Series Presentation, Ali Rayl talks about building Slack's Support Stack particularly after the company's exponential growth spikes. Ali Rayl is the Director of Quality and Support at Slack where she’s built the team to manage more than 5,000 corporate clients including Stripe, Rdio, Medium, Airbnb, Expedia and Buzzfeed. In the past she was the Director of QA at Songbird — an open-source cross platform music player built on Mozilla’s XULRunner and GStreamer.
Full Video available Here: http://www.heavybit.com/library/developer-operations/video/2014-09-16-ali-rayl
A SaaS Metric designed to Increase Free Trial ConversionsLincoln Murphy
CCAs & Engagement – An Uncommon Way to Engage & Convert Prospects in Your SaaS Free Trial.
A few years ago I came up with a set of metrics that I called Common Conversion Activities – or CCA – that I defined as “The things that all or most paying customers do during their trial.”
In July 2012 I gave a 54-minute presentation where I introduced the next version of this ever-evolving set of metrics for measuring Free Trial success, the CCA, and I want to share that with you now.
See the video of this presentation here: http://sixteenventures.com/free-trial-metrics
This is useful for educators and learners of MBA, which is made in lucid style for easier understanding and to be a handy tool before exams or while teaching.
Maximizing Profit Through Strategic Pricingrobertmckinney
PRICE has a far greater effect on PROFITS than REVENUE and COSTS have. In fact, on average across the S&P1500, each 1% change in PRICE equals an 8% change in PROFIT. This presentation introduces is an introduction to the overall good and bad pricing strategies, including Differential-Value Pricing (sm)
Price is one of the marketing mix. Here price related activities are illustrated in PPT style to make the students, teaching faculty and the other related people to understand easily for their teaching and learning.
This webinar covers the fundamentals of Value Pricing so that participants can:
Understand the relationship of pricing with the other elements of the marketing mix.
Achieve the value you deserve through optimal pricing strategies that maximize profits.
Ensure that marketing is more proactive to optimize value for new products and maintaining value over different life cycles.
The Strategy accelerator - Business models with sustainable competitive advan...Alfred Griffioen
Innovate your business model to gain higher ROI. Determine your sustainable competitive advantage (market relevancy or a unique product) and choose your strategy: ally, combine, excel or consolidate. This presentation in English is based on the Dutch book 'De strategieversnelling'. See www.strategy-accelerator.com
MSA is pleased to bring you this informative webinar by industry expert Paul Erickson, as he demonstrates the benefits of different competitive pricing strategies you can begin implementing in your store immediately.
2. Traditional Approaches for Pricing
Based
Approach Upside Downside
on
Cost-plus Costs • Focus on profit • Ignores market factors
• Ignores customer value
• Costs can and will change
3. Cost Based Pricing
• Cost-based approach to pricing combines a calculation of
costs with a target profit margin to arrive at a target price
Target Price
$1.50 / unit
Profit margin
$0.50 / unit
Costs
$1 / unit
Pag
4. Cost Based Pricing
• What happens if production costs decrease?
• What if some customers will pay more?
• What if sale volume is less than expected?
5. Cost-based Pricing - Example
Total Cost Unit Cost
Direct Variable Costs $10,000,000 $10.00
Direct Fixed Costs $20,000,000 $20.00
Administrative Overhead $5,000,000 $5.00
Full Cost $35,000,000 $35.00 14%
Revenue $40,000,000 $40.00
8. Traditional Approaches for Pricing
Based
Approach Upside Downside
on
Cost-plus Costs • Focus on profit • Ignores market factors
• Ignores customer value
• Costs can and will change
Market-based Competition • Reality of the market place • Customers will promote
competition
9. What price are you willing to pay?
$100
Lower
Sales
Customer
Rep $75
Lower
$50
Lower
12. Understanding Price Competition
Firm
Pricing Strategy
& Execution
Intensity of
Firm
Competitive
Profitability
Rivalry
Industry
Health
Source: Competitive Strategy, Michael Porter, 1980, Free Press
13. Market Based Pricing
• Price competition is a negative sum game.
• Competing on value is a positive sum game.
14. Traditional Approaches for Pricing
Based
Approach Upside Downside
on
Cost-plus Costs • Focus on profit • Ignores market factors
• Ignores customer value
• Costs can and will change
Market-based Competition • Reality of the market place • Customers will promote
competition
Value-based Customers • Higher prices for customers • Difficult / expensive to identify
who get more value • Difficult to implement
• Lower prices for low value
customers can expand
market size / revenue
15. Understanding Customer Value
Economic Value Non-Economic Value Other Types
Quantifiable in Characterized in Societal – benefits /
financial terms psychological terms cost reductions for a
• Increased revenue • Higher confidence population
• Decreased costs • Fewer hassles Clinical value –
• Increased margin • More prestige improvements in care
or price level process
Potential value –
enhanced opportunity
for value creation
16. Elements of B2B Customer Value
Economic Value
Negative
Negative Competitor’s
Differentiation
Differentiation unique value
Your unique
value
Positive
Positive Value
Value delivery Customer perspective
Differentiation
Differentiation
delivery
Value
Value Defined on relative basis
Depicted in economic terms
Total Economic
Value
Price of Next
Best Competitive
Competitive
Different value for different
Competitive
Alternative
Reference
Reference customers
Source: The Strategy and Tactics of Pricing, Nagle and Hogan, 4th edition, Prentice Hall
17. What influences the customer’s
willingness to pay?
Their perception of value
18. Maintain Relationship between Price and Value
High Price High Price
P1 Offer1
Offer 2
Offer 3
P2
Low Price Low Price
Low Value High Value Low Value High Value
24. Terms for Pricers
• Pocket Price
– The net price for a transaction after
all on-invoice and off-invoice
deductions, promotions, and rebates
etc. are deducted.
– A relative measure of price
performance
• Pocket Margin
– Calculated by subtracting the total
direct costs (direct material, direct
labor) and any transaction related
costs from the pocket price.
– A comprehensive measure of
transaction attractiveness
25. Price Waterfall – Better Insight
Green Co. Blue Co.
$100
$80
Invoice Price
Invoice Price
28. Pricing Processes Span the Organization
President
BU General
R&D Finance Marketing Sales Operations
Manager
29. Price Waterfall
• You can’t improve what you can’t measure
• Better insight for more informed decision
making
• A robust source of information on pricing
• Is bigger better for price waterfalls?
• Start simple, capture improvements, increase
sophistication
31. Tools of the Trade
• Policies
• Approval
• Guidance
32. The Spend Management Agenda
• Assure reliable supply
• Negotiate lowest price
• Rationalize suppliers
• Source low cost-country producers
• Eliminate design cost and lead times
• Drive internal compliance
33. What is the Right Model for the Organization?
Centralized Decentralized
Response vs. Control
Elements of each model are required for optimal business
performance
34. Resources to Learn More about Pricing
• There are a number of good books on the subject
– Pricing and Profitability Management: A Practical Guide for Business
Leaders
– Contextual Pricing
– The Strategy and Tactics of Pricing
• Professional Pricing Society
– Conferences and workshops
• Vendavo University OnDemand