B2B Pricing Strategies for Revenue Growth

By Kendra Lee

You’ve poured your heart and expertise into building a stellar B2B business. Clients come to you to solve business challenges, and you deliver. But there’s one lingering question that can keep even the most successful business owner up at night: Am I charging the right price??

Pricing is a core element of your Revenue Generation System , yet it can feel like a delicate dance.??

When your prices are set too high, you risk scaring off potential clients. When priced too low, not only do you leave revenue and profit on the table, but also imply that you deliver lower value than your competitors. Pricing isn’t just about profit margins. It’s about strategic competitive positioning, client perception, and unlocking sustainable revenue growth. When you have the right pricing strategy, it reflects the value your solutions provide, attracts your ideal clients, maximizes your revenue, and fuels your company’s success.?

Build a Strong B2B Pricing Foundation

The question of how much to charge can be daunting for any business owner.??

Think of the number of times you have hemmed and hawed over a price even after examining all the costs from every angle. You’ve poured your expertise into building a business that delivers results for your clients, and you deserve to be compensated fairly.??

But how do you translate that value into a pricing structure that attracts your ideal clients and fuels your growth??

Pricing expert David Wilkins of Wolverine Business Solutions emphasizes, “What’s really important is that the price is critical to setting the stage for your market.” Done strategically, your pricing communicates the value you bring and sets the tone for successful client relationships.?

Step 1: Calculate Your True Costs

To determine your price, start with the cold, hard numbers in four primary areas. There are others I haven’t included, such as the cost of borrowing money and taxes, but these four areas give you a good idea of what it costs to run your business.??

Service Delivery

Identify the costs of delivering your service daily. Think about your delivery team’s salaries, the specialized tools that help you deliver your services, and products you use for delivery. Include all the direct costs for fulfilling what the client purchased. In accounting terms, this is your Cost of Goods Sold (COGS).?

Operational Costs

These expenses are the backbone of your business. Include expenses related to the marketing and sales activities you do to generate new business. If you have office space, the rent, utilities, and office supplies are part of your operational costs, along with any administrative staff, both virtual assistants and salaried. In accounting terms, these are your Selling, General, and Administrative Expenses (SG&A).?

Research and Development

If you’re in technology or manufacturing, for example, you may have costs associated with developing new products or services. With AI taking off, many companies are spending significant resources researching how to integrate it into their offerings. If you do research to expand your solutions, take a look at your expenditures here.??

Your Desired Profit Margin

Here you are doing some dreaming. Peers you network with may share their profit margins to give you an idea what you might target. Your accountant may advise you. You need a sense of what you want your profit margin to be to determine the uplift you’ll apply to your costs. A healthy profit margin helps turn your business and personal ambitions into reality.?

Here are some questions to ask yourself:

1. What profit margin do you want??

1. How much money do you want to have so you can reinvest it in the business??

1. How much money do you want to have so you can take distributions??

If just this short section has your head spinning, the book Profit First by Mike Michalowicz has some excellent charts and formulas to assess your profitability and identify target allocation percentages.?

Step 2: Define Your Value Proposition

Knowing your costs is a crucial first step to make sure that they’re met by the prices you generate and with the volume of products and sales or services that you expect to be able to generate. That gives you a starting point.??

But what’s even more important once you’ve covered the costs, is that you understand your value proposition. Focus on what makes your approach and your results truly unique.?

As David Wilkins emphasizes, “It’s all about understanding how your solutions benefit your clients,” and price accordingly.?

Benefits and Outcomes, Not Features

Clients aren’t buying a list of services. You may think they select your solution for the features included in your proposal, but that’s not what they’re looking for when they make a decision. They’re buying a solution to their problems. Zero in on what business problems and issues you expertly solve.??

Ask yourself three questions to identify your solution benefits for clients:?

1. What problems do prospects have when they first approach you??

1. How do your solutions solve those problems??

1. How does solving the problems help their business, staff, and client experience??

Be specific in your answers.?

Tip: The best insights sometimes come straight from the source. Survey your current clients, asking them what they appreciate most about your relationship. Their answers could illuminate strengths you hadn’t even considered as key value points.?

Quantifiable Resultsnbsp;

Numbers speak louder than vague promises. While you can describe the value a client will realize when their issues are solved, real numbers carry the greatest impact. Question clients about the return on investment they’ve seen. This may equate to an increase in revenue, but it could also be improved productivity, increased efficiency, staff retention, client satisfaction, or other quantifiable results.??

You’re looking to identify measurable business outcomes your clients have experienced in their own words. That is the value to them. You want your price to align with that value.?

Value Expectationsnbsp;

While numbers are important, you also need to consider your target markets and what they expect from your solutions. Are they looking for high value, high quality solutions, and a long-term consultative relationship? Do they want the best quality for a fair price and fast delivery with a transactional relationship??

Value Pricing Considerations:

• Long-term vs. one-time solution?
• Client industry expectations?
• Client sophistication and maturity with your solutions?
• Your value proposition relative to your competition?

Factor this knowledge with your target market’s expectations into your pricing.?

The Competitionnbsp;

Part of your value proposition is understanding what your competition is offering and how you compare. Your goal isn’t to undercut them. Rather, it’s to clearly recognize where your value proposition fits relative to your competition and price accordingly.?

• If you are delivering higher value than your competitors, you should be charging more.??
• If you’re delivering similar value, you should be competitively priced.?
• If you’re delivering lower value, your price should reflect that lesser value.?

In the right target market, clients will appreciate the value your solutions provide and they’ll be willing to buy.??

Step 3: Craft the Right Price

Once you have a handle on your costs and value, you’re ready to set prices that work for your business. Consider these tactics:?

Profitability Pricing

Think of cost-plus pricing as your safety net. It starts with calculating all your business costs, then adding a markup to make sure you’re always profitable. It’s straightforward, keeps you from undercharging, and is a good fit if clients are really focused on budget. But remember, if your value is way higher than your costs, you could be leaving money on the table. Additionally, price is an indicator of quality. You may unwittingly be communicating lower value and losing potential high-value clients.?

Value Pricing

This is where you get to charge what you’re truly worth. Focus on the amazing outcomes you create for clients. When you can clearly show the value you bring, clients who care about results will happily pay more. It might take some extra work up front during the sales process to prove that value, but the payoff is worth it.?

The key is to focus on what makes you different. If you offer a better experience or get better results, don’t be afraid to charge more than the competition.?

Different Revenue Streams

It’s likely that you have different products and services and combinations of them, providing you different revenue streams. You can have different pricing strategies for those. Think broadly. You don’t have to have one-size-fits-all pricing. Consider the differences in the markets you’re serving with those offerings and price accordingly.?

Pricing Psychology Is a Subtle Art of Influence

Pricing isn’t just about numbers. It’s about understanding how the brain processes those numbers. By incorporating a few simple psychological strategies, you can guide clients toward choices that are both profitable for you and feel like a great value for them.??

Set the Benchmark

Clients use pricing as a way of judging the value they’ll receive. The first price they see for anything you offer becomes the anchor by which they judge everything else you quote after that. When a prospect asks for a “ball park” number or a range, think carefully. You’re setting a benchmark in their mind. If you start with a quote for a high-end solution, everything after that will be relative to it. Likewise, if you start low to grab their interest, they’ll expect a low price for the next thing you recommend, even if the value they will receive is higher.?

The Power of the Number Nine

There’s a reason why so many prices end in 9 or 99. Our brains subconsciously perceive these “charm prices” as a bargain. That $1,999 service mentally registers closer to $1,000 rather than $2,000, making the price seem far more appealing, even though it’s just a penny less! Psychologically, it’s a huge factor that can make a significant difference in terms of buying decisions.?

The Choice Factor

Humans crave a sense of control. Offering three tiered packages, like Bronze, Silver, and Gold, provides a choice. Most people naturally gravitate towards the middle option, perceiving it as the best blend of features and price with the ideal balance of value and affordability.??

Pricing psychology isn’t about manipulation. It’s about understanding how clients make decisions and presenting your pricing in a way that highlights the value you offer and makes them feel confident as they say “yes.”?

Transforming Pricing Into Your Superpower

Pricing is a critical element of your B2B Revenue Generation System. The right pricing structure reinforces the value of your solutions and attracts the right clients who value your company. It delivers the profitability your company needs, not only to sustain but to grow.??

Let’s work together to determine your value proposition so you can unlock the power of strategic pricing.

For detailed FAQs on B2B Pricing Strategies for Revenue Growth, visit our blog here. Explore more articles on sales and marketing in the blog section of?our website. ?