What is a pricing audit checklist?
A pricing audit checklist guides businesses in identifying the hidden weaknesses in their product pricing and helps create valuable strategies to make them more competitive. By identifying potential pricing flaws in their existing strategy, businesses maintain their consistency which results in strengthening the brand image and in preventing potential mistakes, such as over-discounting products just to become more competitive in the market. Conducting a price audit can also reveal accounts that cost you money.
A pricing audit is a sales strategy that assesses your pricing process, intends to maximize profitability and helps you make your company more competitive on the market. While performing a pricing audit checklist can sometimes be challenging – you have to self-reflect and figure out where you can improve – you will want to conduct the audit in order to guarantee the best return on the work you put into your product.
In this article, you will learn:
1. How to conduct a pricing audit in 3 steps
2. Which types of sales strategies exist
3. How a checklist tool can help boost your business with digital pricing audits
How to conduct a pricing audit checklist?
Pricing audits ensure that the price of your products matches the customer segments that you are targeting. If you create value-based pricing strategies, you will be able to capture different market segments by offering a number of products and services that are unique to each particular segment.
These are the three basic stages of a pricing audit:
1. Define the Goals and Strategies of Your Business
The primary reason why pricing strategies fail is that they might not be aligned with the goals and strategies of your business. Your company as a whole should be working towards achieving the same goals. Whether it is to capture a bigger market share or increase your profits, each person within your organization should be aware of those objectives and work to achieve them.
Objectives and goals are the foundation of your pricing strategies. The best pricing tactics come from a clearly defined strategy.
2. Evaluate data to understand existing practices
Evaluate current pricing practices, incentives, discounts, the market, customer segmentation, and every area of your business. Your goal is to evaluate every area of the business, including sales, marketing, finance, operations, and all other parts that affect the pricing.
Conduct your analysis the following way:
- Interview the management and sales teams
- Check the pricing across distribution channels
- Gauge how your company stands against both direct and indirect competitors
- Examine historical data
3. Identify Weaknesses and Opportunities
After getting a solid overview of your company’s current strategy, the goals you want to reach, and the parts of your business that affect the pricing process, you will be able to find weaknesses in your current strategy.
If you find some current practices that do not resonate with your objectives, you should remove, change or improve them. For example, if your goal is to increase your revenue and you are giving way more discounts than you ought to do, then it’s your chance to re-align them to your business objectives.
4 Different types of sales strategies
Aside from price audits, sales strategies are another important element to accelerate business growth. There are different types of sales methodologies but you need to determine which one works best with your business. Here are the four most successful strategies:
1. SPIN
This sales strategy focuses on asking consumers to find out what their desires are. In that way, you will be able to create a stronger emotional bond with them. These questions are categorized into four types:
- Situational questions are used to gather information about the general situation of the customers
- Problem-based questions seek to identify the challenges and pains of the customer so you can provide the right solutions
- Implication questions aim to uncover a problem that the customer did not notice and you position yourself as the problem solver.
- Need-payoff questions show the value to the customer that the solution will create for the problem they have.
2. Value-Based
This sales strategy focuses on the value that you provide to your customers every time they use your product or service. Before the relationship starts, you dig deeper into your target’s business model, focusing on every nuance and detail they provide.
By asking focused questions and analyzing the answers they provide, you’ll be able to find out that even similar companies might need different strategies in solving a problem. These differences become the basis of the pricing and sales models as well as the cost structures of a business.
3. Solution
The solution-based sales strategy is all about solving problems rather than on selling a product. The goal is to establish yourself as a thought leader or expert in a specific field. Eventually, as you gain the consumer’s trust, it will be easier to convince them to buy what you are offering. It’s a good strategy since consumers trust experts more than salespeople. More so, consumers want to be in control of their buying decision, and demand more information about a product before buying.
4. Challenger
The challenger strategy is the most recent and popular method these days. Instead of providing a solution or adding value, you challenge the existing strategy or model your target customer is using. It starts by asking if they are satisfied with their current strategy. Then, you present a new alternative or solution and compare it against the method they are using, zeroing in on the benefits and results.
Boost your sales with digital pricing audit checklists
With Lumiform’s mobile app, you can easily carry out your pricing audits and evaluate your business strategy via tablet or smartphone – online or offline. The app guides you step by step through the audit process so there is no chance of overlooking questions.
Lumiform’s powerful app and desktop software offers numerous advantages over paper documents:
- Use one Lumiform’s ready-made templates from our template library to get started digitally in no time.
- Customize our templates to your desires or use the checklist builder to convert your paper audit checklists into the digital realm.
- With our intuitive mobile application you can conduct your pricing audits with ease and in no time – wherever you are.
- All results, images and comments are automatically bundled in a digital audit report that you can use to plan and strategize further.
