What’s your pricing power score?
Warren Buffett famously says that “pricing power” is the single most important factor he uses when evaluating a business.
Because businesses with strong pricing power also have great products, brands and reputations, so are more able to increase their prices without losing customers.
But how do you know what your pricing power is?
We’ve developed a simple assessment tool to help you calculate your pricing power and give you a percentage rating that classifies your business as either Strong, Moderate, Poor or Weak.
It asks you to rate your pricing in 8 different categories:
- Business Goals
- Financial Impact
- Products & Services
- Process & Systems
There are some factors that you can’t control (like your competitor’s actions), but there are plenty that you can control (like your pricing strategy). But knowing what you should focus on to make improvements is the key to getting started.
And a small improvement in your pricing power will make a big difference to your bottom line.
Click on the link here to get your Pricing Power Scorecard and find out your pricing power score.
The Pricing Power Scorecard has been adapted from an article by Kelley School of Business, Indiana University, 2018. https://www.sciencedirect.com/science/article/pii/S000768131830154X
The original article was based on a study of over 100 global pricing experts to assess the factors that affect pricing power, but it was mainly orientated towards larger businesses and global corporations.
We have adapted the model using our own categories and simplified it for small and medium sized businesses to make it more relevant for that audience.