{"id":47995,"date":"2021-09-21T16:44:08","date_gmt":"2021-09-21T22:44:08","guid":{"rendered":"https:\/\/www.vendavo.com\/?p=47995"},"modified":"2026-01-27T23:03:34","modified_gmt":"2026-01-28T06:03:34","slug":"video-unimportance-of-price-elasticity","status":"publish","type":"post","link":"https:\/\/www.vendavo.com\/podcasts\/video-unimportance-of-price-elasticity\/","title":{"rendered":"Revenue Roundtable Video Podcast: The Relative Unimportance of Price Elasticity in B2B"},"content":{"rendered":"\n

In our latest installment of Revenue Roundtable<\/em>, we explore how one particular topic may be a concern of many B2B companies, but it isn’t as relevant as they may think.<\/p>\n\n\n\n

Mitchell Lee<\/a><\/strong>, Profit Evangelist at Vendavo, is joined by David Anderson<\/strong>,<\/a> Business Consultant and Strategic Pricing Advisor, to dig into the subject. Below is a somewhat longer and unabridged version<\/strong> of their conversation that gets into more of the details.<\/p>\n\n\n\n

Mitch:<\/strong> So today, we’re going to talk about price elasticity, right?<\/p>\n\n\n\n

Dave: <\/strong>I meet with hundreds<\/em> of B2B businesses a year who are considering or engaged in efforts to improve their pricing.  One thing that I generally notice in these discussions is a general fascination and focus on the notion of \u201cprice elasticity\u201d, or the volume impact of price improvement (increase) decisions.  In many scenarios, there’s a desire to measure the price-volume relationship and use that formal numerical measure as part of price increase modeling and considerations.   <\/p>\n\n\n\n

Mitch:<\/strong> It’s a very intuitive concept…<\/p>\n\n\n\n

Dave: <\/strong>Right. Now, I\u2019m not discounting that there can<\/em> be volume sensitivity to changes in price, but I would like to make the case that if you are selling your products or services with a sales team and with sales-led engagement with customers, there’s a long list of pricing priorities that should take precedence <\/strong>over a focus on measured price elasticity.  Indeed, in B2B businesses it can be counterproductive and a fools-errand to focus on using elasticity measures in predicting the volume impact of price. <\/p>\n\n\n\n

The entire premise of price elasticity projects is to attempt to document the change in expected volume, based on a change in price.  This concept has relevance in \u201cremote\u201d selling scenarios (like retail sales) where selling is not influenced by a sales team, and products may be a commodity.  In B2B however, any documented price-volume measure and its effect on sales & price acceptance is massively overcome by sales factors and selling context.  <\/p>\n\n\n\n

In my opinion, the following list of focus-areas are much more important areas of focus in any B2B commercial transformation effort: <\/p>\n\n\n\n

    \n
  1. Understanding how you drive value with customers <\/li>\n\n\n\n
  2. Understanding how sales can capture value with value-based selling efforts, <\/li>\n\n\n\n
  3. Understanding how to support sellers with the best information to support their understanding of customer context to support a sales event (historical sales data, peer customer sales data, segment insights & price recommendations, etc.) <\/li>\n\n\n\n
  4. Improving the efficiency of the selling process to improve customer-response quality & timing, and improve \u201cselling time\u201d for sales (eliminating process friction, and minimizing administrative effort for sellers) <\/li>\n\n\n\n
  5. Improving the information provided to pricing teams for their price setting efforts <\/li>\n\n\n\n
  6. Automating the manual effort associated managing price and pricing data movement in an organization <\/li>\n<\/ol>\n\n\n\n

    The things that sales teams do in a sales effort determine a customer’s acceptance of price, much more than any simple change in price. The basic high school economics concept of \u201cyou will sell more at a lower price, and less at a higher price\u201d does not<\/strong><\/em> necessarily hold true in the world of complex product and solution sales in a B2B context. <\/p>\n\n\n\n

    Your sales team\u2019s ability to understand customer context, to understand your products’ value drivers for customers, and their ability to convince customers of that value overwhelm any natural price-volume effect, and should be the focus of your efforts<\/strong>. Don\u2019t live on the \u201cprice curve\u201d, rather move the \u201cprice curve<\/a>\u201d with information and value-led selling.\u00a0\u00a0\u00a0<\/p>\n\n\n\n

    <\/div>\n","protected":false},"excerpt":{"rendered":"

    Why one particular concern may not be as relevant as some may 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