High price strategy

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With the high price strategy ( high price policy or premium policy ) companies try to achieve the highest possible long-term prices as part of their pricing policy . The reasons for high prices are the exclusivity of luxury goods, for example . Luxury branded items ( premium brands ) are often offered in the high-price segment (for example watches from Rolex , cars from Ferrari or designer clothing from D&G ). The price elasticity of these products is very low, so that the - financially strong - consumers do not or hardly react to price changes.

The high price strategy in technical sales

The basis of the high price strategy is a structured approach in technical sales. The aim of the high price strategy is to achieve the highest prices in the respective market. These maximum achievable prices are, however, linked to the market price, but are usually somewhat higher. Thus, high-price strategy companies have higher profit margins than their competitors in the market. In technical sales, the high-price strategy primarily relies on unique selling points, quality and the company's innovative strength and the associated image. External communication by high-price strategy companies is mostly limited to the terms quality and innovation. The high price strategy is used by many successful companies, but is never communicated to the outside world. The companies fear a loss of image. In order for a company to be able to achieve the highest prices on the market over the long term, certain conditions must be created.

Strategic approaches to the high price strategy.

Employee motivation

In order for salespeople to achieve higher prices than their competitors, the goal in sales must be to offer the customer the highest possible performance in order to achieve the highest price. All employees of the company must recognize the deeper meaning of the strategy and be motivated for the goal. This is an ongoing process and must therefore be anchored in the company philosophy.

Customer segmentation

This is a purely strategic approach that must then be interwoven with the day-to-day operations in sales. Customers are not only broken down into ABC customers based on sales or contribution margin , but also based on their own growth potential. The target market is analyzed. Based on this analysis, the focus in sales is aligned on certain strategic customer segments.

Strategic radar

Permanent competition analyzes and customer surveys are in the foreground here. These surveys are used to establish unique selling points in order to distance oneself from the competition in a targeted manner. Every single employee must recognize unique selling points at the point of sale and be able to carry them into their company. CIP ( continuous improvement process ) is necessary so that the products and services can be continuously improved .

CRM integration

The CRM system should be able to map customer segmentation as described above. Another task of the CRM system is to interlink the strategic and operational goals. In technical sales, decisions are usually not made by individuals, but by a group of people. Thus, all people who contribute to the decision-making must be identified. Individual strategies for each of these people from the decision-making group help to better influence the decision-making process. The CRM system must also take this fact into account.

Operational approaches of the high price strategy

Classic sales practices are used in the operative part of the high-price strategy. However, it should be noted here that the demands on the sales staff are quite high. This means that the phases in the sales talk are an important success factor for higher prices. Only when the customer recognizes a higher benefit for himself will he be willing to pay a higher price. That is why structured sales processes are important. In the first step, individual customer-related strategies are developed. After that, relationships with specific people at the target customer are built up and consolidated. Under the umbrella term "customer relationship management", people are regularly contacted in order to establish a relationship of trust between customer and supplier. The focus of all activities is on customer benefit and the associated development of unique selling points, because these have the greatest influence on pricing.

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