We’ve all heard about corporate branding and personal branding, but have you ever thought of giving your pricing a brand of its own?
As I mentioned in my SmartCompany webinar last year, Apple could easily brand its iTunes pricing “Why not?” pricing. You hear a song on the radio and you really want it on your iPhone or iPod. It’s only $1.99. Why not buy it? And supermarkets, including American giant Wal-Mart and UK chains Tesco and Asda commonly adopt the generic branding of “Everyday Low Pricing”, or EDLP.
Last week I caught up with the managing partner of a law firm. It wasn’t because I need some legal work done, or because this law firm got rid of timesheets eight or nine months ago (although that was of interest). As part of the move to value-based pricing, the firm has also branded its pricing “Moore’s Agreed Pricing”, or MAP.
It’s worth thinking about some of the benefits of this approach to pricing.
By branding your pricing with your corporate name (something that users of EDLP often don’t do), you make it unique. As a result, you’ve just differentiated yourself with something the competition can never match (unless they acquire you). You have ownership.
But for this to be successful, your pricing has to be truly different from the competition. No more picking up an industry benchmarking report and charging the going rate, or something a few percentage points above or below the competition, just to keep the status quo. Leave it for others to tackle customers’ perceptions of “sameness” and “commoditisation”.
As a result of the change required, there’s a high likelihood that some sort of company-wide cultural change program will be required. This provides closure to the old pricing model or approach, and excitement and belief around the new pricing model.
That sort of change has to include the support from the upper echelons of the organisation: a corporate pricing champion is mandatory.
Last, but definitely not least, this new approach to pricing needs to get built into the corporate induction program so all new employees understand how and why the business prices this way. This, along with the pricing champion and the cultural change required, embeds the new approach to pricing in the business.
Branding your pricing is not going to be without its challenges.
Some people will be fast, early adopters, while others will take a while to master it. Some people will have trouble having value conversations with customers, when they’ve been used to having price-based (and discounting) conversations with them. And they will need to think about pricing on outputs and deliverables, rather than inputs.
But given that all these challenges can be mitigated, it seems to me that there are more advantages than disadvantages to branding your pricing.