What are people predicting for pricing in 2021?
Steven Forth is a Managing Partner at Ibbaka. See his Skill Profile on Ibbaka Talent.
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A new year has begun. What will it bring? Hopefully not the level of challenge and disruption we all experienced in 2020!
The Covid pandemic continues to rage in many countries, but with vaccination programmes underway and many adjustments already made there are indications that 2021 will be year of adaptation and renewal. What will this mean for pricing?
A number of people have share posts with their pricing predictions for 2021.
Steven Forth at Ibbaka and Kyle Poyar at OpenView
For the past two years, Kyle Poyar from OpenView, a growth stage VC based in Boston MA, and I have shared our predictions for the future.
the themes we addressed in 2020 held up quite well. We stand by our predictions from 2020 and believe these will accelerate in 2021.
The role of product led growth and the centrality of pricing to a product led growth strategy
Pricing as a part of the customer experience (CX)
The need to track and quantify value being delivered across the customer success process
The need for speed in both adjusting pricing and in getting quotes out
Category creation as a growth strategy and the role of pricing is communicating value
Pricing for value adoption
We have added a few more for 2021. You can read Pricing transformations in 2021 here.
The four key predictions are
Continued adoption of product led growth as a strategy (Kyle)
Pricing models must be able to adapt (Steven)
Usage-based pricing will be normalized (Kyle)
Pricing will be seen as a lever for social change (Steven(
In regard to the last point, pricing practitioner John Kearney has noted
“ I wonder whether vaccine pricing will kick start a conversation about "fairness" in pricing - Because we as a Pricing Community can detect a difference in "willingness/ability to pay" or "perceived value" should we always take advantage of it. See Uber not connecting pricing to battery levels or Safari users being quoted higher airfare prices.“
Alessandro Monti at CBS International Business School
Alessandro Monti, Professor for Corporate Management and Organization at CBS International Business School in Cologne, Germany share his predictions on LinkedIn.
Monti is a bit more sceptical of the subscription model, at least in B2C, but he also sees room for innovation in pricing models, especially those based on usage and connected to value.
Social value drivers (what Ibbaka calls community value drivers) will be important across many sectors.
“Finally, altruism and social exchange norms will be the most important value drivers for companies. Customers do remember, and will stay away from corporations who showed greed and wrongdoing during the pandemic.”
Gautam Mahajan at the Customer Value Foundation
Gautam Mahajan has been a standard bearer for the value-based approach to business over the past two decades, publishing many important books on the subject. He shared his predictions for 2021 in the post Hope, The Value Creator for 2021.
Hope is a powerful message at the beginning of any year, but especially at the beginning of this year.
In this post, Mahajan talks about the power of hope in determining how we experience value and what kind of value messages we will be receptive to.
Rob Litterst on the Good Better Best Blog
Over the past year Rob Litterst has emerged as one of the most interesting new voices in pricing. Watch for our interview with him later this month.
He gathered his predictions for the year in Five pricing trends for 2021. His predictions are
Value Metrics Shift toward Transparency
Skin-in-the-Game Pricing
Subscription Swerving (changes to how people approach subscription models)
Monetizing fun (the gamification of pricing)
Selective monetization
Rob has identified a lot of important examples and I encourage you to give it a read.
Kyle Westra at Wiglaf Pricing
Customer segments ae shifting: Both the pandemic and the recovery will have asymmetric effects on customers depending on their industry, geography, supply chain, and leadership, to name a few variables. Companies may find that they need to reassess their segmentation and how it informs their pricing. New customers may become interested in your value proposition, while traditionally strong customers lose willingness to pay.
Time for pricing to shine: In uncertain times, profit dollars remain the best guide of whether a company is succeeding or failing. As pricing professionals carry the mantle of profitability, it is the perfect time for them to demonstrate the impact of their pricing work to company leadership. It’s now or never.
What are you preparing for in 2021?
Let us know how you are preparing for pricing change in 2021.
This could be anything from the new skills and competencies you are working to build and apply, to new approaches to data collection to inform pricing decisions, to innovation in pricing models.
If I am right that 2021 will be a year of adaptation, this should be an interesting year. Share your thoughts with me at steven@ibbaka.com.
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