Ryan Dohrn, CEO of Brain Swell Media, reports in his weekly Shweiki Media webinar how publications and small businesses can prepare their pricing strategies towards building added revenue. Dohrn claims that he advises every publisher or sales rep he works with to start gaining extra revenue by setting up what he calls a competitive matrix.
What’s a competitive matrix?
The first step in assembling a competitive matrix is constructing a list (through excel) of a businesses’ competition. The matrix includes competitive attributes such as multi-media/sales offerings, SWOT analysis, and price points. Dohrn suggests directly emailing your competition (maybe from an alternative address) asking for figures, or going to a third party such as a common advertiser and picking their brain on what they are paying, and what they appreciate about the particular service. Whenever a business can accurately identify the advantages it has over its competitors, it can price its services accordingly. If the matrix shows that a certain owners services are weak compared it its competitors, the owner can drop its price point (strategically to gain more clients) and therefor add revenue. The opposite applies to stronger matrix models.
Optimizing on Discounts
Dohrn claims that the complaint he hears most throughout his day to day dealings with his clients are that their competitors are continuously offering discounted services. Dorhn suggest that anyone fighting his competitor’s discounted prices needs to get specific in what a “discount” really means. For instance, what size is the discount being offered? How long can the competitor keep running this deal? What is the business really getting out of buying a discounted product? If the answer is simply holding onto more money, then an owner or sales rep can track back to their matrix and pitch the client that, “yes by buying a discount you are technically saving money. But don’t our competitive advantages make up for that extra amount?” Pricing strategies are detail strategies. Whenever every aspect of the market is taken into account, a business can show value through specifics, and a successful price point sets itself.