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One of the many things I love about the holidays is attending parties. Joining family, friends, neighbors and colleagues in celebration of the season offers us all a chance to solidify long-term relationships and get to know people better. This year during some of the many casual conversations, I was struck by the number of statements made by my friends and neighbors that were based on opinions and beliefs they had heard from others, rather than being based on facts. I realized that pricing strategies are often based on the same types of un-tested opinions and beliefs; and while that is relatively harmless socially, it can be an expensive profit killer in any business.
I recently read a blog about pricing strategy at EBN Online, Set Pricing for Customer Loyalty & Long Term Profitability, in which the 3rd recommendation is “remove complexity” from your pricing. That is not the first time I have heard or seen that recommendation, and we have had clients ask us to help them remove […]
I am a fan of the Miami Dolphins, but since I live in Pittsburgh, I only get to see my team occasionally. The Dolphins were visiting the Steelers this year, so I decided to buy tickets. The Steeler games are all sold out, so the secondary market was the only option. There were some interesting pricing lessons demonstrated by Steeler season ticket holders, including: 1) know what the current market conditions are, 2) understand your specific value proposition, 3) understand your competitive strengths and weaknesses, 4) in a negotiation, the person who needs the deal the most has the least leverage.
Last week the FCC said it is considering allowing the use of cell phones and other mobile broadband devices on flights at altitudes above 10,000 feet. Predictably, some people cheered the idea and others gnashed their teeth. One thing is clear to me – there will be different pockets of value to different flyers and we can expect the airlines to segement customers and set prices accordingly….
There is a wide variety of cell phone user types, and each type of user travels on a plane at some time. Some view their phone as an evil necessity and are happy to turn it off. Others see their phone as a vital extension of themselves and it hurts to turn it off. Then there are people whose livelihood depends on using the phone, and when they turn it off they are being unproductive. Each different type of user will place a different value on new cell phone regulations. I expect the airlines to try to figure out those different types and offer prices for each.
Pricing effectively in the B2B world can be complex; there are many things to consider. That has caused many a sales person to say – “I’m too busy to study all this stuff.” So here are 8 Keys to Selling at Better Prices:
1. Differentiate your products and yourself, and communicate so your customers understand those differences. If you can communicate what is special, you can price it appropriately….
A couple weeks ago I wrote a blog post about bundles. This week I saw the headline of an article in the Pittsburgh Post-Gazette Internet Providers Promote Bundle Deals, and I thought – “good timing”. Well, the article is not really about bundles, it is about different prices for different segments, but the timing is still good…..
The internet service providers are simply executing a classic segmentation strategy.
Canadian movie exhibitor Cineplex began experimenting this summer with an offering that bundles a ticket to a first-run movie plus a downloadable digital copy of the movie to be downloaded months later when on-demand and DVD versions are released. One Ticket to Rule Them All. It is too early to determine the results, but it got me thinking about the topic as a pricing strategy – when do product bundles make sense?
Last weekend I read two articles about leadership in the Harvard Business Review which were not specifically about pricing best practices, but are very relevant. Don’t Spin a Story. Be a Better Company by Leslie Dach makes the point that “it’s a huge mistake to assume that once you’ve explained your perspective, the public will embrace you.” …they can’t stop with talking the talk. More importantly, they need to walk the walk.
CNN Money published an article September 6th meant to alarm consumers that they may be paying too much at Walgreens. The article is based on a survey by the National Consumers League (NCL) and a labor union coalition Change to Win. There is no surprise that the survey results would be spun to imply Walgreens is doing something wrong. However from my perspective, they are doing things right.
According to Consumer Reports in this article http://www.today.com/money/dont-be-afraid-buy-store-brand-food-consumer-reports-says-8C11022220, for many consumer products there is very little difference between private-label or store brands and the national brands they compete with, so consumers should not be afraid to try them…. Whether you are setting pricing strategy for the name brand or the private-label product, it is critical that you make data-driven decisions, not emotional decisions. In other words, don’t guess – do the math and use the analytics.
