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This Week in Pricing > 12/14/14

TWIP is a recap of the week’s best pricing focused news, strategy expert and technology leader’s thought leadership, industry news and events, and resources for pricing professionals.

EditionSponsor-ValueInnoruptionAdvisors

This Edition is Sponsored by:

Value Innoruption Advisors

Founded by Dr. Stephan Liozu, Value Innoruption Advisors provides training and consulting resources for organizations interested in embedding value-based methodologies in their go-to-market strategies related to innovation, marketing, pricing, and sales. Value Innoruption Advisors offers two popular value and pricing management certification programs – Customer Value Modelers™ (CVM™) and Change Agent in Pricing™ (CAP™).

Click a link below to learn more…

 

Top Headlines

Amazon To Let Shoppers Bargain For Lower Prices With New “Make An Offer” Option | TechCrunch

Amazon, pushing hard to pick up more business during the holiday season, wants you to make a deal. Taking a page from the likes of eBay and Priceline, it is introducing a new dutch auction-style feature. Users can now “Make an Offer” on a product, suggesting a lower price to the vendor than the one listed […]

Pricing Tips – How to Compete on Price (Without Going Bust!) | The Daily Egg

It used to be that Web-only retailers could get away with checking their competitors’ prices, at most, once a week. Now, with e-tail behemoths like Amazon.com using dynamic prices to shift pricing on a dime (particularly on in-demand products), other retailers have to scramble to catch up. Is this something you can or should catch up […]

Walking Away From a Customer Who Demands a Discount | NYTimes.com

Dealing with such requests hasn’t always been easy for us either. That is why we decided to gather some data a few years ago, and track our decisions. We discovered that over time our pricing had evolved into a tier system. Tier 1 is the higher-profit work, Tier 2 is lower profit. Naturally, we prefer […]

8 Reasons Selling on Price Never Works | The Sales Hunter

So you say you’re a good salesperson because you’ve got pricing that is hot and you have the flexibility to make it hotter when necessary. What it comes down to is you’re selling on price. Here are 8 reasons why selling on price never works: 1. Your current price (which you think is so hot […]

Holiday price warfare – Hope is not a strategy | Canadian Marketing Association

In the battle for consumers’ wallets, retailers need discounting that is strategic As retailers look toward the peak holiday shopping season, many will be focused on driving top line sales using discounts. It’s an understandable strategy. Physical retailers will be looking to stave off the threats from online shopping, which on Cyber Monday is a […]

Pricing Psychology – 7 Sneaky Retail Tricks | CBS News

The psychology of pricing explains why we do many of the silly things we do with our money. Retailers work hard to manipulate us, tweaking price tags and offering “special” promotions to get us to spend more than we normally would. Why are we so vulnerable? In part, we’re just wired to think in certain […]

Greyhound Modernizes IT Infrastructure to Provide More Pricing Options for Consumers and Optimize Operations | MarketWatch

DALLAS, Dec. 9, 2014 /PRNewswire/ – Greyhound Lines, the largest intercity bus operator in North America, today announced a new effort to modernize its IT infrastructure in order to unlock yield management, introduce dynamic pricing, enhance customer convenience and optimize loads throughout its network. The transformation is being implemented in partnership with Software AG (frankfurt tecdax:SOW). […]

When Discounting Is Bad for Business, and How Marketing Can Help | The Huffington Post

I am a big believer in the concept of data-driven scientific marketing; trying lots of experiments and rapidly iterating based on the results. Today’s digital tools combined with adept business insight make it relatively quick and easy to optimize your marketing. Marketers are no longer burdened by the expense and delay of printing and mailing […]

Pricing is all about the Psychology of Value | Inspector Insight

As Rory Sutherland says on the cover, price is “the most understudied, undervalued and oversimplified subjects in business decision-making”. The Psychology of Price by Leigh Caldwell provides a clear, comprehensive and usable guide to pricing from the perspective of human behavior, and is really the only book of its kind on this topic. Leigh Caldwell […]

pricing – bundles, versions, price discrimination | ALEX LEVASHOV

A bit of economics here, in the slideshow below I am telling how more complex than plain price for all pricing can help a business to extract more value.  It isn’t just a theory, I have personally practised the suggested approach with reasonable success. Read complete article here: pricing – bundles, versions, price discrimination.

Freelancing: How to talk yourself into charging more | Andy Adams

Why don’t you charge like they do? You’re doing basically the same thing, right? The answer? I’m insecure. If you’re like me, you may have a bit of Impostor Syndrome. You can’t justify those rates to your clients. But more importantly, you can’t justify those rates to yourself. So, you may have trouble raising your prices. We can fix that. But instead of […]

Pricing With Precision – The Unsung Hero Of Growth | CMO

Improved precision benefits business. Period. This is especially true when it comes to pricing strategy. Consider that a mere 1% price increase causes operating profits to climb more than 11%. Compare this to the impact of a 1% improvement in variable costs, fixed costs, or even sales, which net at most an 8% improvement in […]

The Pitfalls and Annoyances of Price Testing | Viget

In my time at Viget, I’ve spent considerable time thinking about how to maximize the revenue organizations generate online. Traditionally, we have helped clients more effectively sell by creating beautiful marketing websites that present product information clearly and concisely. But when it comes to optimizing total revenue, there are two parts of the formula – price […]

Merry Christmas! Gas Price Decline Is Like a Tax Cut | DailyFinance

Most Americans have received the equivalent of a significant tax cut. No, Congress did not suddenly agree to do something, and no, President Obama did not issue an executive order. (He may be able to do that on immigration, but not on taxes.) What has happened is that gas prices have unexpectedly plummeted to the […]

10 Reasons Why Discounts and Sales Are Bad for Business | Inspector Insight

This is the time for sales and promotions around the world, from the madness of Black Friday to the January Sales that promise to give us so much more for so much less. But are sales and discounting really in the interests of business and brands? The evidence is pretty clear – the answer is […]

7 cornerstones for implementing successful pricing initiatives in Singapore | Singapore Business Review

The price has more influence on a company’s profits than any other factor. Manufacturing companies, as a key pillar of Singapore’s economy with almost 25% of the GDP, were very successful in reducing costs in the past but have little experience in optimising their prices. Thus, money is left on the table in almost every […]

Price Matching – Crucial Advice for Small Business Owners | smallbiz technology

Price matching has recently become one of the best tools in business competition. I’m sure you’ve heard of it, but just in case, price matching refers to a business policy where if a customer can find a lower price at a competitor store, the business will match – and sometimes even beat – the competitor’s […]

Let’s Talk Turkey – The Cost of Thanksgiving Dinner | EconEdLink

TASK In this lesson you will what a price index is, what it represents, and how inflation and deflation are shown through the change in the price index. You will also explain that a price index is constructed by comparing current prices of a market basket of items to the prices of the same market […]

The Cost And Value Of Drugs, Part One – Prices And Development Burdens | Forbes

Debates about how much we should pay for pharmaceuticals are unlikely to subside anytime soon. Drugs that cost tens of thousands of dollars, and some over $100,000, have become ever more common, with insurers and payment benefit managers (along with Medicaid programs) beginning to balk at paying these prices, outcomes be damned! Two recent publications […]

The Downside of Black Friday and Other Price Competition | Strategic Pricing Solutions

Black Friday was disappointing for retailers this year.  Sales were down 11% from last year, ‘Black Friday’ Fades as Weekend Retail Sales Sink, and I expect the retailers to report lower margins when they report earnings in the coming months.  This follows a constant bombardment of email boxes and television ads announcing early sales and deeper discounts. […]

How Desperate Is Your Pricing Strategy? | ChainDrive

Some Cyber Monday deals are still happening today, at the end of the first week of December. When retailers don’t have adequate price management tools, their strategies suffer and desperate discounts make shoppers wonder about the viability of the business. Too many discounts doesn’t sound like a bad thing until it begins to feel like a […]

Pricing your Services – a tip from Best Buy | Chris Lema

“What’s your hourly rate?” We hear it all the time. Some people get fancier. They create a rate card. Doing something: X dollars / hour Doing something else: Y dollars / hour Doing something harder: Z dollars / hour This is clearly better than a single number. And it’s the core of how most larger […]

The Case Against Paying Designers By The Hour | Fast Company

CREATIVITY DOESN’T START WHEN YOU PUNCH A CLOCK. HERE’S A BETTER WAY TO CHARGE FOR DESIGN WORK Someone, somewhere, at some time decided that the value of design directly correlates to the time spent solving a client’s problem. Today, most design firms use an hourly rate to determine creative services. Although clients may agree to […]

Closing Your Early Sales – The Power of Secret Pricing | Tech Cocktail

When you’re looking for early sales, you’ll notice that each customer wants to wait until someone else bites. They give you positive feedback, and appear as if they’re going to go through with the deal. Then, as you start getting close, they ask to wait until you have other customers on board. This can be […]

Prescription Drug Pricing – The Fine Line Between Value and Greed | Xconomy

What’s got me pondering the meaning of the word “value”? Drug pricing. I’m trying to figure out when a drug’s price crosses over the invisible and undefined threshold from value into greed. How much should a drug really cost, and how are drug prices actually calculated? This mysterious process takes place behind closed corporate doors […]

Why You Shouldn’t Be Afraid to Show Your Prices on Your Website (Video) | Firefly Coaching

There are reasons for sharing and reasons for not sharing. The most important things is to think about it and be clear about the decision you make, either way. I have a preference for one and I’ll tell you all about it in the video. Read complete article here: Why You Shouldn’t Be Afraid to […]

Bayer CEO happy to have fair outcomes-based pricing | PharmaTimes

Dr Dekkers went on to say “it is okay to be tested on that in the process of price-setting, that is fine, we should only be paid for the value we bring”. However he did add one important caveat. He noted that in no other industry does a product’s price drop 80% when it goes […]

 

Events & Resources

 

Events

Conference: Strategic Pricing Conference | SPA

When: January 15-16, 2015

Where: Ft. Lauderdale, FL at the Ritz Carlton

Learn how leading manufacturing and distribution executives have unlocked the keys to faster growth, stronger customer relationships, and market-leading profitability with SPA’s proven strategic pricing processes and technology. Event Overview Equal parts strategy and practical tactics, this complimentary Strategic Pricing Executive Overview event at the Ritz […]

Seminar: The Value-based Pricing of Innovation | Stage-Gate International

When: April 14-15, 2015

Where: Washington DC

Early Bird Price: $1495 US Are you capturing the value of your innovation? Firms are pouring billions in innovation investments every year with the goal of creating differentiation and competitive products and services. Many, however, forget two critical elements in the innovation management process: the clear definition and measurement of […]

Conference: Manufacturing Pricing Excellence – Barcelona 2015

When: May 20-22, 2015

Where: Barcelona, Spain

Event Overview On behalf of Copperberg and the entire Pricing competence team I am delighted to announce our 3rd Annual Manufacturing Pricing Excellence conference scheduled for 20-22nd of May 2015 in Barcelona, Spain. Since our last edition in Amsterdam, together with our advisory board and delegate network we have been […]

 

Pricer’s Points Blogs

Pricer’s Points: Boost your Profits with a Submarine Warrior’s Lesson | David Mok

The U.S. Navy’s nuclear submarine is one of the most modern, efficient and effective weapons in the military arsenal. Submarines are the cornerstone of the Navy’s conflict avoidance and resolution. Attack submarines or hunter-killers, which I served on, are specifically designed for the purpose of attacking and sinking other submarines, surface combatants and merchant vessels. Furthermore, […]

Pricer’s Points: The 5 biggest challenges in pricing in Asia | Jesper Hansson – CPP

I was part of a discussion recently about where I see the biggest current challenges in pricing in Asia and it inspired me to share my views with you in this blog. When it comes to developing powerful pricing strategies and well-oiled pricing departments, Asia is still behind both North America and Europe. There is […]

Pricer’s Points: Using decoy pricing to maximise profits. | Matt Burnett

Use decoy pricing to encourage your customers to trade up. The main objective of any pricing manager is maximising revenue and profitability. It’s not easy and is in fact an endless task. One way we can try to achieve this is through trade up. If we can encourage our customers to buy our most highly […]

 

Top Discussions

Discussion: Prices on your website – a good idea?

The pros of displaying your prices By stating your price upfront you’re eliminating obstacles – not only for your customer (they won’t have to call or email to find out what you charge), but also for yourself. Liaising, negotiating and quoting for jobs can chew up a huge amount of time, and at some point […]

Discussion: Why Charging by the Hour is a Cop Out. Employ Value Pricing Instead

Box Free IT Blog I’ll go out and say it. The billable hour is a terrible measure for pricing your services. No one says to themselves, “You know what? I feel like buying 4.75 hours of my accountant’s time today.” Rather, they’re more inclined to say something like, “You know what? I really need help […]

Discussion: SaaS Free Trial – Requiring a Credit Card is Shortsighted

SaaS Growth Strategies Blog That said, why do you offer a Free Trial in the first place? So prospective customers can get to know your offering before paying for it… … remember, they don’t already know, like, or trust your company or product yet. And we know in B2B especially, trust is huge… trust that […]

 

Books

As a service to pricing professionals, we have compiled a collection of over 75 of the best pricing focused hard-copy books and e-books available. The entries for each book are tagged by subject matter, include the author(s), publisher, date of publication, a picture of the front cover, and a brief summary.

The Long Tail – Why the Future of Business is Selling Less of More

Summary: The New York Times bestseller that introduced the business world to a future that’s already here–now in paperback with a new chapter about Long Tail Marketing and a new epilogue. Winner of the Gerald Loeb Award for Best Business Book of the Year In the most important business book since The Tipping Point, Chris […]

The New Industrial Revolution – The Power of Dynamic Value Chains

Summary: WHICH INDUSTRIES WILL BE EXTINCT IN THE 21st CENTURY. This book is as close to a crystal ball as you may ever find. It may make the difference between your company s survival and extinction. Reading the future and being able to spot tomorrow s trends today demands a combination of imagination and knowledge. […]

The Oxford Handbook of Pricing Management

Summary: The Oxford Handbook of Pricing Management is a comprehensive guide to the theory and practice of pricing across industries, environments, and methodologies. The Handbook illustrates the wide variety of pricing approaches that are used in different industries. It also covers the diverse range of methodologies that are needed to support pricing decisions across these […]

 

Cartoons

One should always take a little time out to enjoy the lighter side of their profession. Enjoy the following sample from our collection of our favorite pricing related cartoons.

Price Negotiations

 

Quotes

One should always take a little time out to enjoy the lighter side of their profession. Enjoy the following sample from our collection of our favorite pricing related quotes.

“Price is what you pay. Value is what you get.”

     – Warren Buffett

“Perhaps the reason price is all your customers care about is because you haven’t given them anything else to care about”

     – Seth Godin

 

Other Resources

Pricing Resources

The source for valuable pricing resources including: academic programs, articles, blogs, books, cartoons, certifications, papers, quotes, reports, training, and videos.

Pricing Certifications

The source for top formal pricing certification programs.

Pricing Training

The source for top formal pricing training programs and service providers.

Pricing Videos

Enjoy our collection of our favorite pricing related videos and share your favorites with us and we will add them to the collection.

Pricing Tech

The source for pricing technology vendor related information and resources.

Pricing Experts

The source for pricing strategy expert vendor related information and resources.

Pricing News LinkedIn Group

Join 1,000’s of your peers in the our LinkedIn discussion group. The group offers a place to share the latest pricing strategy and technology, news, events, resources, thought leadership, and discuss the latest pricing related successes and failures in the news.

 

About Pricing News

Pricing News is a sponsor supported organization dedicated to providing free high-value resources to pricing professionals. It is the source for daily and weekly digests of pricing strategy and industry newsevents, thought leadership articlesblogsreportsacademic research, and other resources and special offers. We also share highlights from top pricing discussions and publish articles from pricing practitioners in our Pricer’s Points blog series.

Join the Pricing News LinkedIn group and learn from your pricing peers and industry thought leaders or get your Pricing News on Twitter or Google+.

Until next week,

Matt Balfour

Founder & Managing Director of Pricing News

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