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Friday, Jul 12, 2024

So Which Price Is Right?

Per Sjofors believes that the questions asked by his company Sales4Profit Inc. are universal to any business in any part of the world. Those questions revolve around what the best market is to go after and how to best attract the intended customer that will pay the right price. It comes down to Sales4Profit measuring the willingness to buy a company’s product or service. “Interest in something is not the same as interest in buying,” Sjofors said. Working from his home in Woodland Hills, Sjofors operates his virtual company in conjunction with a business partner in Sweden. For more than a dozen years, he operated pricing consultancy Atenga Inc., for which he developed the process that he continues to use with clients. Earlier this year, Atenga merged with Sales4Profit. The company has 22 employees, with eight working in the U.S, including sales people in Texas and New York. The rest are spread in various European nations. “I have a team of smart people who are doing the analysis and measurement,” Sjofors said. The cost for Sjofors’ services range from a low of $4,995 for a startup to as high as $14,995 for the “platinum” service. A “diamond” service starts at $30,000. Number crunching The process Sjofors uses centers around measuring a potential customer’s willingness to buy at the highest price. That willingness is combined with value and decision drivers, such as marketing messages, features or functions of a product or service and the way a company goes about selling its product. That data gets collated with demographic information such as income, gender and education of the customer if it’s a retail context. For a business-to-business client the demographic information can be revenue, the industry or the size of the company. “When you do all of this, you get a recipe for which market has the highest willingness to buy at the highest prices,” he explained. Sales4Profit’s clients fall into primarily the small to medium-sized business range of revenue between $10 million to $100 million. The company has done some 500 projects for clients that include Edmunds.com Inc., TripAdvisor Inc., specialty truck and vehicle manufacturer Oshkosh Corp., and technology company Blade Network Technologies. The examples that Sjofors can give about how he has helped companies are plenty – the trade show operator in Las Vegas that doubled its entry fees with the results being better attendance; an insulin manufacturer that switched its marketing message to a customer base that was willing to pay for it; and a software-as-a-service tech company that raised it prices by 40 percent and did not lose a single customer. “This is the beauty of what we do to allow our clients to focus on the market vertical that has the highest willingness to buy at the highest prices,” he said. Skeptical CEOs Keith Marshall, founder of Proficient Audio Systems, a Carlsbad supplier of home audio speakers for both indoor and outdoor installations, hired Sjofors when he was still at Atenga. Initially a skeptic when it came to what Sjofors offered, Marshall became a true believer once he saw the results. “I’ve made good decisions and I’ve made bad decisions, but this was one of the all-time great decisions I have made,” Marshall said. Between 2010 and 2016, Marshall raised prices on his speakers four times. Those increases generated an additional $3 million in profit on sales of $60 million over that six-year period. For the price leader speakers, the increase would be a small amount while for the more expensive part of the product line he could get away with raising the price a bit more. “We would do it selectively and not being egregious about it,” Marshall said. The skepticism that Marshall exhibited toward what Sales4Profit promises is typical of executives that Sjofors meets. The most common challenge he has with clients is convincing them that the process will work. “It is a new concept to many people. Because of that, they need assurances,” Sjofors said. “They can talk with prior customers and so forth to make them comfortable that this works and that it works every time.” The most direct competition for Sales4Profit comes from large consulting firms like Deloitte Touche Tohmatsu Ltd. and PwC. Those firms tend to go after mega corporations and not the market that Sjofors serves. Also, their methods are different from Sales4Profit in that they send a team of consultants to a company for months and charge millions of dollars. Sjofors said that Sales4Profit can generate its measurements in a matter of two weeks. The firm does not deal with strategy or recommend changing management, he added. “We tell them very succinctly these are the people you should market to, these are the messages you should use and this is the price that will give you the maximum revenue and maximum market share,” Sjofors said.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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