Value pricing for B2B: Maximise B2B profitability

Dr Andreas Jonason and Richard Greenwood
Simon-Kucher & Partners

B2B products and services need to identify and market the unique value in their offer to counter the trend towards commoditisation and buyers' squeeze on prices by procurement staff.

Globalisation has dramatically increased the sourcing options available to Business to Business (B2B) companies, and with it, the task of selling profitably to them has become more challenging for vendors. Formerly high margin products have become commoditised and suppliers' ability to set premium prices has diminished as a consequence.

However, there are numerous examples of where sellers have successfully countered this trend, moving negotiations away from product price to a discussion around the unique value that their offer creates. Furthermore, others have constructed innovative charging models to better capture value by aligning the incentives of the buyer and the seller, with positive consequences for their profitability.