Pricing is ... Wrong
Your pricing is wrong. Ouch. Well really, your pricing is most certainly not perfect. No matter how good you are at pricing, there is room for improvement. There is likely a market segment which deserves or can sustain a different price. You likely don't know every price your competitors use, and even if you do they change prices without telling you. New competitors are entering the market. Does your pricing take this into account? You probably don't really know your customer's willingness to pay, and if you finally figure it out their tastes change anyway. Your newest products effect the pricing of your older ones. And what about the product versions you should develop but haven't? As you create new accessories, the optimal price of your main product may change. Are you properly trading off short term and long term gain? You may be able tweak your price endings to win a few more sales. You get the idea. Your price is never perfect. The real question is how much can you benefit from improvement? It depends on how far you've already come in your pricing journey. If you already use value based pricing; if you price segment your market; if you develop products knowing how and why the new products are priced in the portfolio, then you've already made huge progress. There are certainly still gains to be made from pricing improvements, but they will be more modest. However, if you don't explicitly and consciously use these three major pricing strategies, then you almost certainly stand to earn huge benefits from enhanced pricing. No pricing is perfect. That's part of what makes this field fun, finding the next way to improve pricing. The real question you should ask yourself is, "How wrong is your price?" How do you know? Mark Stiving, Ph.D. Pricing Expert, Speaker, Author If you'd like to know more about pricing, read Stiving's book Impact Pricing: Your Blueprint for Driving Profits, available at Amazon and Barnes and Noble.
Looking for the latest in product and data science? Get our articles, webinars and podcasts.