Article

How can a company enforce higher prices? For us BrandTrust consultants, this is a constant topic. Why? Because it requires the power of the brand.

Brands like Red Bull, Apple and Nespresso demonstrate that if a brand is strong, it can be monetized wonderfully. Everyone knows this, including sales: if you have a good reputation and exude a certain indispensability, then it is easier to enforce prices. That is why "pricing with the brand" is and remains an important topic.

First think strategically, not tactically

Sometimes we get calls like this: "We just can't get the prices we need. We fail at the usual hurdles, such as purchasing.

In such cases, we are honest and say: short-term success in pricing is difficult or even impossible. However, it is highly recommended to systematically prepare for the next pricing-wave - because it is sure to come.

Those who have a strong image can demand high prices

Common sense tells us that a good reputation is not built overnight, it takes time. We can learn this from luxury brands, so let's take a look at the Porsche brand.

In the graphic you can see the EBIT margins of luxury brands, including Porsche. The car manufacturer has the highest margin in the German automotive industry at 16%. But that's not all: it is now aiming for 20%.

Excuse me? An already extremely expensive brand like Porsche allows itself to increase its already fat margin by a further 4%? The answer: Yes, of course! It has to do with desirability, with its good reputation. If Porsche were not a strong brand, such a plan would fail.

We want to encourage you with this example. Do you constantly hear: "Price increases - that's not possible, that's far too complex and difficult"? We have to disagree. Of course it is possible!