Personal Case Experience
DISCOVERING OPPORTUNITIES FOR PREMIUM PRICING
Pricing is probably the most powerful and also decisive lever that you can utilize. If you get it right it can be the most effective driver of profitability and deliver fast results. In all my turnaround situations, and actually in all of the successful turnarounds that I am aware of, pricing has been key to success. But if get it wrong, it can have a detrimental effect on your top line and dramatically accelerate decline. Additional complexity arises from the fact that historically-diverse price points across the European Region or even globally increasingly get under pressure, as premium, luxury and lifestyle customers tend to travel the world. That risk is probably the reason why many executives are rather hesitant to experiment with pricing.
From my experience, I have worked with a variety of pricing levers: Realizing substantial, double-digit price increases on existing products, explicitely lowering price points in order to drive volume effects (which is at least as critical as increasing price points). And thirdly, launching new products and services, such as "limited editions". In addition we worked on the business model and pricing structures in order to change effective pricing levels for the customer.
It all depends on the market situation that you are operating in, and - to a large extend - to how professionally you plan and execute your changes. The most important: Not look at it as a once off, but adopt a strategic long-term perspective with a pre-defined objective of what you want to reach when and how. Sudden surprises rarely deliver results and are often a symbol of latent management des-orientation and lacking capabilities. They should therefore be avoided. But if you do it right, you can execute well AND fast.
Having a sound understanding of your pricing strategies and full transparency of status and results is crucial. Standing on such safer ground let´s look up together and discover which premium and luxury stars you could position in the skies.