funda’s subscription pricing will help steady revenue stream
Explore how online leader funda’s subscription pricing help steady revenue stream
Setting the right price is one of the best ways to positively impact a company’s bottom line. Yet, price-setting is not always top-of-mind nor owned by a single department within a company. This holds true across industries, whether it is consumer goods, healthcare, telecom, finance or technology. Sometimes Marketing takes responsibility for pricing, while other times Finance takes on the task. Often, we find that there exists no pricing strategy at all in companies, and thus, no clear ownership of pricing responsibility.
In this article, we explore why this is the case and provide three reasons why the marketing team should take responsibility for pricing. We based our findings on the ESOMAR pricing workshop we hosted with Procter & Gamble.
Let’s have a close look at why price setting is usually not owned by marketing. If you look at the four P’s of marketing (product, place, promotion and price), most interest goes to the first three and ignores ‘price’. While some suggest pricing is not as “sexy” a topic as Marketing’s other three P’s, we suggest the issue has more to do with pricing’s quantitative nature that pushes the practice over to Finance teams.
But big data, better and more intuitive analytics tools and Marketing’s ownership of other data (i.e. web traffic, market research, social media, etc.) have empowered Marketing and Market Research Managers in making data-driven decisions.
Three reasons why Marketing should own pricing:
Big data analysis has become the backbone of contemporary pricing over the last five years. That said, modeling prices based on historic data alone is not sufficient. Customer opinions still matter, and these can be obtained through any number of means, such as customer panels, surveys and even mobile phone apps. Combining traditional and contemporary pricing methods will yield insights that represent the best of both worlds.