Pricing – The Stand Off!!
Right now as I write this in July 2022 there is an interesting situation developing in the grocery market with the effective ‘de-listing’ of Heinz products from Tesco shelves – apparently Tesco feel that the Heinz price increases are too much to accept and as a result they are taking the moral ‘high ground’ and at least purporting to be on the side of the consumer.
I doubt this is the full story as Tesco need to deliver for their stakeholders but without looking at the situation of both parties through an ‘open book’ policy one cannot form an objective opinion. Of course, Tesco will have alternative suppliers of baked beans et al., including own brand, but ‘Beanz Meanz Heinz’ doesn’t it? The consumer will decide in yet another ‘knives out’ battle in the hugely competitive grocery market.
The reality is that price increases and their acceptance or rebuttal will be happening in many businesses and markets over the next few weeks. From the supplier angle, unless these negotiations with customers are skilfully handled, they will not get those increases through – simple, and margins will suffer. If you look at this from the customer/ buyer angle, any decent negotiator (which all businesses SHOULD have in a purchasing scenario) should challenge the credibility and authenticity of the price increase as an absolute minimum.
The other factor that works in favour of certain suppliers is the unique nature of their product and the fewer competitors that can match your product or service, the better your chances of getting that important price increase through.
Like everything in business, from a selling and a buying perspective, those who prepare the best are most often those who succeed in a pricing discussion – if the buyer is poorly prepared – advantage the seller and vice versa.
Don’t forget that it can mean an enormous amount to a business when they get a price increase through. The price increase itself will fall through to the bottom line and as an example versus the current position (in effect the one you want to change) a 2% price increase on a £1.5 million business would add £30,000 to the bottom line over the year.
Given that is the case isn’t it worth thinking about perfecting your pricing sell? Getting expert help in putting a compelling pricing ‘pitch’ together may need you to invest a bit – but the return on the investment will be much, much greater.
Want to learn how to sell a price increase effectively and successfully? Get in touch with us at ignite@tinderboxbusinessdevelopment.co.uk or call us on 0116 232 5231.
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The Tinderbox Team
