This diagram shows price (y) and cost (x) for a product (in 50 different configurations). The blue...
Price is a decision
This is an old truth but it's something we're repeating in every workshopp:p
"Cost can be calculated, price is a decision"
One could argue that price can not be decided, since "it's given by market conditions". Even if this might be right, it's somewhat narrow-minded. As long as you're doing things just like everybody else it's most likely true, but as soon as you have a unique offering you set the price.
The price is the possibility to drive business in a strategic direction. So, say that you want to sell LESS of something price is a very effective way to achieve this.
The reason for writing this post is a discussion last week with a company concerned about their environmental impact. They had realized two things. Their valued employees did not enjoy business travel and running digital workshops during the pandemic proved to be a very effective way to run their project.
So what was the conclusion?
To adjust the price to encourage customers to choose digital ways to do business. It's aligned with the company's own value proposition and it's a concrete way to reduce carbon emissions by several tones of CO2.
Currently their consultancy rate for travel time is 50 %. Starting 2022 the consultancy fee for business travel will be increased to 100 %.
You've probably figured out by now that we're talking about cpq.se. This is a first step to make our business model more sustainable.
The second step is to encourage others to do the same. Put a higher price on your travel and just wait for pricing to do it's magic.