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Managing pricing changes

Change as we know is uncomfortable, no one likes change, least of all if it means its going to cost. Be that time, effort or financial costs.

Monday 1st February 2016

Unfortunately in this day and age change is a part of everyday life, We all know that the price of Strawberries goes up when they are imported and out of season. Seldom do we see prices going down.

Recently we have restructured our software as a service offering. Simplifying the number of modules and changing the pricing structure. So this has lead me to think about how we mange this kind of change. Just over year ago I wrote a blog about “Why do we fear change?” and found that one of the biggest reasons we do not like change is because we are now having to cope with too many changes in too short time space.

So how do others manage to keep up with continued price changes? - Just to be clear this is our first price change in four year!. I have observed my local supermarket hide a price change by advertising the current old stock at the regular price, indicating it is marked down from the new price it will be next week! But why change at all? As we know other costs go up so prices need to change, we need to stay competitive and profitable, - we owe it to our clients to stay profitable so we will still be around to support them in 10+ years time. We want to give our customers the best value for money. But also we want to avoid any obstacles people may have in purchasing our products. Complicated and long selection processes turn people off. According to recent research, this generation due to the overload of social media etc has a very short attention span so long and complicated processes are not going to win everyone over.

We have changed from 13 modules to choose from to only 4 packages, quick, easy, simple. Having grouped modules together means that there are more features in a package so better value. Also our old model was a bit like one price fits all, well that is not true so we have added some simple pricing bands to be fair to all.

Our new structure supports the larger organisations, giving them the features they need and want without the big price tag, and it also gives the smaller organisations the flexibility and structure to help them grow at a price well within their affordability.

But how have we managed the change? We could have gone out with a big bang approach “here is our new price” bang! But we have gone for a softer approach contacting those with more significant changes personally and given everyone plenty of time to adjust to the change. Naturally this has meant that some clients have re-evaluated their use of the product, some have decided to say goodbye while others have added more features and embraced the change, happily more of the later than the former. People have now looked at their data and cleaned up old out of date records, giving a much more accurate view of their organisations.

So change is good, even when it may cost us something.

By : Aukje - infoodle