Sjofors & Partners ran a couple of companies in Europe before moving to the US, where he had a number of CEO positions. Pricing has always been an interesting area for him, and for that reason, he did experiments with pricing in those companies. Some of those experiments worked very well. For example, this could lead to a 25% increase in revenue in a quarter or quarter. Other experiments completely failed. What he had learned in business school about pricing was so theoretical, high-level, and academic that it did not help him understand why some pricing experiments work while others did not. So, when it was time for him to set out on his own, he asked me, “What information would I have had to understand why some pricing experiments failed and others were successful?”.
He asked this so that he could ensure every pricing experiment was successful. The answer to that question is to develop a detailed understanding of how buyers make their purchase decisions, how a company can influence that decision, and what buyers are willing to pay for a product or service. Once he realized that this was the answer, he developed a process to accurately capture buyer’s decision process and willingness to pay and turn that into a detailed understanding of how companies can market, sell and price their product or services to maximize market share, revenue and profits – while keeping customers happier.
Adoption of Technology
Sjofors & Partners developed their own AI software about a dozen years ago, and it has enabled them to deliver more precise and detailed advice to their clients than anyone else in the industry. The reason why Sjofors’ clients gain spectacular business results when they implement their advice on customer targeting, product or service features, marking and sales, and, of course, pricing strategy.
Sjofors & Partners Company Highlights
Since the company’s inception, Sjofors & Partners have labelled themselves as “price consultants,” but they do not consult, even if pricing advice is part of what they do. So, in 2023, the company repositioned itself to what it actually does and became a “pricing research and strategy advisory agency.”
Killing the Competition
There are two main reasons why Sjofors & Partners are preferred in the industry. First, the AI software mentioned above enables the company to be considerably more precise in their client advice and recommendations than the competition. Secondly, their advice and recommendations are developed by actual business people. Not (business or data) analysts or career consultants. This makes said advice and recommendations tailored to their client’s specific circumstance and to their clients’ resource availability, making them much more actionable and practical.
Case Studies of Excellence
This company came to Sjofors saying they tried to increase prices seven years ago but failed miserably. Their cost increased so much that they had to increase prices to stay profitable, and they could not accept another price increase failure. From the research Sjofors did, the team found that there was room to increase prices, but only if the company changed its marketing (especially its positioning statement) better to match its customers’ value perception and expectations. As the company changed their positioning statement, prices increased. In one week, the company grew revenue from $200m to $240m annually, with no loss in sales volume.
Another SaaS company had entered their market with a low price to capture market share. It has successfully made a dent in its market and has 17,000 customers on an annual subscription. Sjofors’ work discovered that prices were much lower than what their customers were willing to pay, and Sjofors’ team recommended a price increase with an average of 41%. To support this, the team helped the company to message the price increase to their customers and then trained their customer-facing staff (salespeople and customer support people) to defend the price increase. As the increase was implemented, the CEO received only one phone call and two emails from angry customers. Not a single customer canceled the subscription. However, prices were still way below what their customers were willing to pay, so a year later, Sjofors went through the same process, and prices were now roughly doubled. This time, about a dozen customers canceled their subscriptions, yet it doubled the company’s revenue. When Sjofors first worked with this company, it had revenue of about $12m annually, and it is now about $180m annually. The reason for the substantial increase in revenue is that the price increases gave the company more resources for market development and also the ability to acquire a competitor.
By being able to target their customers better, by developing a better product or service to market fit, by using the marketing channel(s) and the marketing messages that drive higher sales volume and profits, by using the sales channel(s) and sales methods that yield higher sales volume and profits, by developing a monetization strategy and pricing strategy that minimize sales friction and maximize sales volume and profits, Sjofors & Partners deliver what they promise and beyond.
All in all, pricing is not a number, and it does not live in a vacuum; everything a company does affects how it can set prices. As Sjofors mentioned above, customer targeting, product/service, marketing, sales and monetization strategy all affect how a company can price. If any of these are sub-optimal, a company cannot set prices for maximum sales volume and profits and will leave money on the table instead. At the same time, it opens up the market to competitors who understand the same variables better than the company in question. It is all about taking a holistic view of pricing.
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