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This Week in Pricing > 2/1/15

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.

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Headlines

Uber and Lyft Cap ‘Surge Pricing’ During East Coast Storm | Money.com

Uber won’t charge more than 2.8x the normal rates; Lyft will top out at 3x a normal fare. Worried about getting around during the impending East Coast blizzard? Don’t rule out calling an Uber. On Monday, ridesharing services Uber and Lyft announced they would be capping their “surge” prices for the coming storm. Lyft will […]

The Super Bowl Wings Will Be Fat, Yes, But Pricey Too | Bloomberg Business

(Bloomberg) — On Super Bowl Sunday, expect two things when your order of chicken wings arrives: They’ll be fat, and they’ll be pricey. First the fat part. American farmers are giving their chickens extra feed, taking advantage of plunging corn and soybean costs to help lift poultry production — as measured by weight — to […]

UPS Plan to Tweak Peak Prices May Echo Uber-Like Fare Surges | Bloomberg Business

(Bloomberg) — Getting the latest iPad delivered to your home next holiday season may cost more if United Parcel Service Inc. imposes surge pricing akin to car-booking company Uber Technologies Inc., which hikes fares as demand soars. UPS will “implement new pricing strategies during peak season,” David Abney, chief executive officer of the world’s biggest […]

Are You Following These Powerful Laws of Pricing? | Business 2 Community

You’re leaving money on the table and you know it! And yet, you have customers that are consistently complaining about your prices. There is a science to pricing. And the first law of pricing is that if your customers are complaining about your price, they have no idea why they should choose you. Here are […]

The Freemium Model: What’s All the Buzz About? | Online Marketing Institute

The Benefits I’m going to keep this brief since I think the advantages of freemium services are obvious: it’s an easy way to turn leads into paying customers, since they can try out your services. Because you’re offering them a free service (and not asking for a credit card), you won’t have to do as […]

INTRODUCING DYNAMIC PRICING FOR uberX | Uber Blog

Uber is committed to ensuring riders have a safe, reliable and hassle-free way to move around their city. Sometimes we see such high demand that the number of available cars gets tight. During this time, dynamic pricing will automatically go into effect to encourage more drivers to get out on the road and help ensure […]

Huge Price Gaps Found for Hip, Knee Replacement Surgery | Scientific American

WASHINGTON (Reuters) – Hip and knee replacements, two of the fastest-growing U.S. medical procedures, are subject to huge – and apparently random – price variations within the same geographical areas, a new insurance industry study said on Wednesday. The study by Blue Cross Blue Shield [BCBSFL.UL] health insurers adds to the evidence of massive disparities […]

Do You Still Like Your Surcharge Pricing Strategy? | The Sales Hunter

A few years ago, it was popular for companies to tack on energy surcharges as a way of increasing the price without (in their eyes) actually increasing their price. For years I’ve talked about how this is a dead-end strategy that will always backfire. Every opportunity I had when working with clients, I would work […]

Oil Prices: What’s Behind the Drop? Simple Economics | NYTimes.com

The oil industry, with its history of booms and busts, appears to be in the early stages of its latest downturn. The price of oil has plunged by more than half since June, reaching levels last seen during the depths of the 2009 recession. Both the American and international benchmarks for crude oil were trading […]

Whence local-goods delivery courting investors, adding Uber dynamic pricing | Columbus Biz Insider

Whence LLC, which marries buy-local loyalty with e-commerce convenience at warp speed, is launching its first investor round Friday, the same day it submitted a software update to widen the customer base and introduce dynamic pricing for delivery fees. Co-founder and CEO Web Smith told me he has his first meeting this afternoon with a […]

Four Pricing Principles to Never Forget | Inside Intercom

Most businesses are eventually faced with the key question: How much should we charge? There’s no one true answer. There are no gurus. There’s just you, your financials, and the need to make money. The common mistakes are: Believing everyone should be happy to pay for your product. Believing there is some mythical “perfect” price […]

Warren Buffett’s No. 1 Metric for Picking Winning Stocks (AAPL, CMG) | The Motley Fool

“The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10%, then you’ve got a terrible business.”  Warren Buffett […]

Shoppers complained of shortages of basic goods and complained that prices were too high | Supply & Demand-Chain Executive

What went wrong? Cracking the Canadian retail market, about one-tenth the size of the U.S. and right next door, looks simple. Target’s difficulties show it’s not. There are costly regulations. In addition, most Canadians live near the U.S. border, compare prices religiously and are willing to shop in the U.S. to save money. There’s also […]

Does Price Even Matter? | Both Sides Of The Click

One of the things I’ve tested is price points. My tests have indicated that price points of 7 and 9 tend to underperform price points of 5 and 0 – often by over 30%. So, for example, £75 or £80 would usually be “good” prices compared to £77 and £79. (Good = more sales.) However, […]

A Psychological Approach to Pricing | Foreword Online

While your store’s pricing may sometimes be dependent on factors beyond your control (like MSRP or list prices), you can drastically impact the way your customers respond to your products with a few minor tweaks.  In a post from Maker Mogul, Mark Zhang shares tips to help you view pricing from a psychological standpoint. We’ve […]

How to Manipulate Retail Prices to Boost Sales? | Erply

As a retailer, you have probably been wondering, how exactly do other companies set the numbers on their retail price tags? Where do their retail prices come from? According to Mark Ellwood, the author of “Bargain Fever: How to Shop in a Discounted World“, many retail enterprises use an expensive retail price consultant to determine […]

Death by a Thousand Cuts: Shift to Value Based Pricing | Sanders Consulting Group

Times are tough, and traditional agencies of all sizes have been under pressure for years. And many have not survived. It’s been a slow death by a thousand cuts: pushed out of the strategic high ground by consultants, forced into competing on price by smaller, more nimble specialty firms, design firms and freelancers, and having […]

Could This Pricing Tool For Consumers Disrupt Healthcare? | Forbes

Of all the white hot healthcare topics heading into 2015, none is hotter ‒ or more galvanizing inside the industry ‒ than healthcare pricing. I’m not referring to the cost of insurance coverage (like premiums, deductibles and co‒pays), but the actual cost of healthcare delivery. The kind of pricing that Elisabeth Rosenthal over at the […]

7 essential steps for pricing your #rental #property | EFhomes

Pricing a rental property is more complicated than most investors understand, especially if you want to get it right. We’ve all heard stories about what a neighbour or another investor was able to rent their unit for. If they could get that rent, you should be able to get the same, right? Unfortunately, that’s just not true. In […]

Exclusive: in-house lawyers complain about firms failing to offer pricing options | LEGAL FUTURES

Large corporate clients are demanding “far more” fixed fee and ‘menu’ pricing, a survey based on interviews with 40 in-house teams and 50 top 100 law firms has found. All the in-house lawyers in the survey said law firms were “not offering a sufficient range of pricing options” and “more worryingly, those options had to […

What your price says about your brand | Designing an MBA

Last week I received an email from a reader that I’ll call L. L had gone through the worksheets in Pricing for Profit and in order to make the kind of profit she was hoping for, she realized she’d need to double her prices. In her words: “This brings my pieces to double what I’m […]

David vs Goliath: E-commerce company Boomerang takes on Amazon in pricing battle | Economic Times

While there are many price-comparson players, what dif ferentiates Boomerang is its price perception index, which conveys whether a retailer is perceived as cheap or expensive by customers. It advises price changes for popular products depending on customer perception of the client and the pricing offered by rivals. On January 5, Boomerang examined almost 40,000 […]

Avoid the pricing ‘race to the bottom’ with these 5 questions for your customers | BRW

The recent news about Coles and Woolworths being taken to task by the ACCC for their questionable dealings with suppliers has highlighted a major problem plaguing customer-supplier relationships. ‘Race to the Bottom’ is Barrett Consuting’s number one sales trend for 2015, because of the drastic impact it is having on sustainable sales and buyer relationships. […]

Amazon changed the price of the Bible over 100 times in five years | Quartz

Amazon is famous for changing prices frequently to test the demand for products or undercut a competitor on hot items like Beats headphones or Razor electric scooters. A generic King James version of the Holy Bible wouldn’t seem like an obvious candidate for such dynamic pricing. But data show that Amazon has changed the price of the top Bible in […]

Yes, gas prices are helping restaurants | Nation’s Restaurant News

Restaurant executives at the ICR XChange conference last week were reticent to give any credit to gas prices for rising sales. More than one noted that there is no evidence gas price fluctuations cause people to go out to eat more often. That’s true most of the time. But the decline in gas prices has […]

Click here for more recent articles.

 

Events

Webcast: Learn How Iowa Fluid Power Improves Price Realization with SPA | SPA

When: February 18, 2015 2:00 PM Eastern 

Register to attend our webcast where Jim Kaas, President of Iowa Fluid Power, will share their journey to pricing excellence and how they are leveraging science-based strategic pricing tools to improve price realization by identifying price-sensitive products and services. To implement a solution that enhanced profitability, developed pricing […]

Webcast: Stopping Margin Erosion with Pricing Technology | SPA

When: March 11, 2015 2:00 PM Eastern

Register to attend our webcast where Brandon Liebhard, Vice President at Hodell-Natco Industries, will share their journey to pricing excellence and how they are leveraging science-based strategic pricing tools to stop margin erosion by identifying price-sensitive products and services. To implement a solution that enhanced profitability, developed pricing discipline, and […]

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

When: April 14-15, 2015

Where: Washington DC

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 […]

Click here for more recent events.

 

Resources

Pricer’s Points Blogs

Pricer’s Points: Rules When Online Shopping Fails | Rocky D’Adamo

For the last 8 years my Christmas shopping has been a breeze. I always received great deals and was pretty much finished in 1 day. This is shocking and envious for some. My parents always had a bad habit of waiting until the week before Christmas to out to Woodfield Mall and fight a crowd […]

Pricer’s Points: I hit my head on an algorithm | Jesper Hansson – CPP

Online shopping is becoming a jungle for some and for other a nightmare. Dynamic pricing strategies are becoming more and more frequent and companies like Amazon is said to be working with 2,500,000 price changes a day. Dynamic pricing is basically a pricing strategy where you change your prices often based on different factors. Some […]

Pricer’s Points: Pricing Quality (Designs) – it’s all about Psychology | Lee-Bath Nelson

Pricing a product is tricky – lower isn’t always better (some examples below) and the price conveys so much more than just cost plus profit, especially when selling to consumers. This is where psychology steps in with beneficial tips for pricing. So, let’s say you have designed a beautiful vase that can be 3D printed, […]

Click here for more articles by pricing professionals who share their insights and experience.

 

Top Discussions

Discussion: It’s Time to Embrace Congestion Pricing

Gizmodo Article An ambitious new transportation plan for DC announced last week includes a massive public transit expansion, additional subway line, and beefed up network of bike lanes. But the proposal that’s getting the most attention is the introduction of congestion pricing. Yes, DC wants to charge cars to enter its downtown. And more cities […]

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: Uber agrees to new national policy that will limit surge pricing during emergencies

The Verge Article The taxi app falls in line with numerous laws that consider dynamic pricing during storms to be illegal price gouging Uber is well known for using a dynamic model it calls surge pricing that adjusts the cost of a fare based on supply and demand. The company’s CEO, Travis Kalanick, has defended this practice, […]

Click here for more top pricing discussions.

 

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.

Competitive Cost-Based Pricing Systems for Modern Manufacturing

Summary: In an era of fierce international competition, manufacturing firms must have a thorough understanding of their cost structure and how that structure relates to pricing and product mix decisions. Two competing conceptual approaches to designing product cost systems that support decision making are Activity-based Costing and the Theory of Constraints. Rather than argue in […]

Contextual Pricing – The Death of List Price & the New Market Reality

Summary: A few leading companies have jettisoned ideas about pricing that other companies believe are indispensible. The result has been superior performance against competitors who persist in a simplistic 1990’s belief in “value.” Contextual Pricing describes how buyers are influenced by comparison points and contextual messages more than by actual price levels. Identical products can […]

Cost Estimating & Contract Pricing – Tools, Techniques & Best Practices

Summary: The process of estimating the cost for the development and delivery of a product, service, or solution can range from simple to highly complex based upon multiple factors including: technology maturity, urgency, geographic location, quantity, quality, availability of resources, hardware and software, systems integration and more. This book provides a comprehensive discussion of cost […]

 

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.

Pricing Strategy

 

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.

“Pricing is actually pretty simple…Customers will not pay literally a penny more than the true value of the product.”

     – Ron Johnson

 

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+.

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