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This Week in Pricing > 2/15/15

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.

EditionSponsor-StrategicPricingAssociates

This Edition is Sponsored by:

Strategic Pricing Associates

SPA is the leading provider of pricing analytics to 100′s of complex companies of all types: manufacturing, distribution, equipment, services, and software/technology products. The benefits are staggering; and they are typically accomplished in less than 90 days. Our typical client improves profitability by two to four percent of sales. SPA Clients include over 200 manufacturing companies including Parker HannifinRockwellGEExxon MobilCaterpillar as well as over 400 distributors including Harry Cooper Supply CompanyIndustrial Distribution GroupAH Harris, and ThermoFisher Scientific.

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Headlines

 

B2B Pricing: Emotional & Economic Value | OpenView Labs

Getting emotional and economic pricing factors to work together is the black magic of B2B pricing. Both are important and both come together in the customer’s willingness-to-pay. Willingness-to-pay is something pricing experts talk about a lot. Some people, especially those focused on optimizing pricing by analyzing historical transactions, see willingness-to-pay as something out there to […]

Ten questions to ask when pricing your product | The Globe and Mail

Great products and services don’t guarantee success. You also have to price them correctly, which requires knowing your customers well and what they’re willing to pay, as well as what your competitors are charging. You also might consider market segmentation, product bundling, and both the tangible and intangible benefits you’re selling. We spoke to four […]

The Decoy Effect: One Pricing Strategy You Don’t Want to Overlook | Freshplum

It’s common sense to want your product to look good, and one tried-and-true way to make that happen has always been through contrast. If you can compare your product favorably against a competitor’s product, then you should do it. Similarly, it is not uncommon to see a brand or a store offer a product that […]

Technology today, what’s the best pricing strategy | Examiner.com

We often hear, see, or experience the wow of much the innovation taking place. And the hits keep coming. But, for a moment, beyond the actual product, a lot of us, as consumers, may still be price sensitive. For in a world of buyers and sellers, hagglers vs. negotiators, etc., we are all motivated by […]

Facebook adds Craigslist-like features for buying and selling | Mashable

Facebook has started rolling out new ways for people to buy and sell things on the platform. As an alternative to services like Craigslist or eBay, Facebook users sometimes turn to Facebook Groups to make purchases. Previously, however, this was mostly done informally. … Facebook users can now select a “sell” button instead of “post” […]

8 Pointers for Setting a Price in Negotiations | Entrepreneur

Setting a negotiation price is critical for entrepreneurs. After all, this one factor in negotiations can drive the profit in a deal. Here are eight tips for successfully negotiating the price of your product or service: Related: Break Through Uncomfortable Power Struggles in Sales Negotiations 1. Don’t go below your reservation price. The reservation price is the price […]

Evaluating the Merits of Building Negotiating Into Your Prices | Entrepreneur

One way of dealing with customers who expect a discount is to build negotiating room into your price structure. A benefit to handling the issue in this way is that not everyone will attempt to negotiate. Some people will pay the higher asking price, which will increase your profit. Conversely, you may not wish to […]

How To Create An Effective Pricing Strategy That Doesn’t Kill Your Profits | Sales Benchmark Index

When it comes to boosting short-term sales, discounting works like magic. Reps love it; customers respond to it. Most of your deals depend on it. As CFO, you know how deeply discounting is embedded in your sales culture. Reps don’t want to hold out for premium pricing and risk losing a sale. They’d rather close […]

How to Compete With Free (Video) | Inc.com

Jesse Lipson, founder of Sharefile file storage, explains how he differentiates from large competitors like Google that offer a similar product for free. Read complete article here: How to Compete With Free.

Why Microsoft’s ‘buy only what you use’ pricing strategy is a big deal | Fortune

The software giant’s move to charge for software based on actual “consumption” is one likely to be emulated across the industry. … From my standpoint, Microsoft’s flexibility when it comes to how businesses or individuals want to pay for software could be very important. Over the past year, it has completely overhauled its volume licensing […]

The Psychology Of Pricing And Your Brand | Brand Quarterly

Pricing is much more than just saying “How Much”. Are you hurting your brand and your profits by sending the wrong unconscious messaging to prospective purchasers? Would a few pennies lower or higher make a big difference? Is your pricing presented in the right way? Learn how to win the “Brand Price Game”. Mention any […]

Lesson 16: Mastering Pricing Principles | Product Psychology

There’s a reason people on Craigslist are always overvaluing their crap: the right “price” cannot be perfectly deduced; it is highly dependent on context. Legendary investor Warren Buffet once said, “Price is what you pay, value is what you get.” Since time immemorial, entrepreneurs and salesman have tried to figure out how to sell their […]

Pricing Strategy Starts with the Customer | The 500B

When it comes to pricing, it is easy to get lost: there are so many theories on what works and what doesn’t. The way that we price our products and services sends a message the prospective buyer: cheap, value-oriented, luxury, high-end. This is how we interpret the value of the product based on its price. […]

Resistance to value-based pricing: a failure of imagination | Lawyers Weekly

In an effort to radically modernise pricing mechanisms, the in-house team at Bendigo and Adelaide Bank are no longer engaging with law firms that do not offer value-based pricing. … “[We want to] give firms some tools to … understand price outside the construct that we all, as lawyers, grew up with. “We actually think […]

Seizing the Pricing Opportunity Before Someone Else Does – The PricingBrew Journal Interview of David Bauders | Strategic Pricing Associates

In this conversation, David Bauders, SPA’s Founder and President, discusses some of the typical pricing problems he’s encountered working with hundreds of distributors and manufacturers around the world. Highlighting the common barriers and hurdles that must be overcome along the way, David provides a number of insights and tips for generating results while aligning to the organization’s appetite […]

Pricing Your Products So You Don’t Leave Money on the Table | Ira Kalb

Pricing is one of the building blocks of marketing that appears to be easy to understand, but is probably one of the most difficult. Many think it is easy because we all buy products that have prices, and many believe all you have to do is sell the product for more than it costs you […]

Pricing: How To Negotiate Price Without Destroying Your Brand | Don Crowther

Does this sound familiar: Prospect: “We really love this proposal, but we just can’t pay the price you’ve proposed. Would you be willing to give it to us for $X?” Congratulations, you’ve just found out that your prospect is interested in your offer, But now you’ve entered… “The Price Negotiation Zone.” Warning: Whatever you say […]

Why You Should Never Ask Customers What They’ll Pay | Ash Maurya

An optimal price is one that is accepted but not without some initial resistance. It is your job to both set that price and convince the customer. Apple is a master at this. They manage to charge a premium for their products and get people lining-up for their products. Pricing is considered more art than […]

How To Emulate Some Of The Most Innovative Companies | Fast Company

Here are a few ways I draw inspiration to make sure I continue to think “innovate” and not “stagnate:” 1. LOOK BEYOND PERKS TO SOLVE SUPPLY AND DEMAND The needs of consumers have a causal effect on how businesses strive to meet current demand. Hotels and airlines have solved this issue with dynamic pricing, changing […]

What Uber Can Teach Us About Health Care | Forbes

One of the most interesting things about Uber is the way its prices change at different times of day and at certain times during the year. In a nutshell, when demand is usually high, prices go up and in normal times they come back down. This is called “surge pricing” or “dynamic pricing” and it […]

When Hospitals Buy Doctors’ Offices, and Patient Fees Soar | NYTimes.com

Imagine you’re a Medicare patient, and you go to your doctor for an ultrasound of your heart one month. Medicare pays your doctor’s office $189, and you pay about 20 percent of that bill as a co-payment. Then, the next month, your doctor’s practice has been bought by the local hospital. You go to the […]

Why Cheaper Oil Doesn’t Always Lead to Economic Growth | WSJ

Tumbling oil prices were supposed to boost growth in a host of major oil-importing economies. It isn’t necessarily working out that way. Some governments have moved already to shore up their revenues by raising gasoline taxes or cutting fuel subsidies. At the same time, falling oil costs have pumped up deflation fears across Europe and […]

Novartis AG Anticipates Price War With Amgen, Eli Lilly & Co. Over Psoriasis Drugs | Bidness Etc

Novartis, foreseeing a potential price war for its psoriasis drug Cosentyx, has strategic pricing plans in place to win a higher market share in the long run Mr. Epstein, talking about the approaching price war, said: “When Amgen launches and Lilly launches, assuming they do, that will give payers more leverage to negotiate price discounts, […]

40 Years Ago…And now: Air travel – Fixed fares to dynamic pricing | Business Standard News

From the late 1970s to the early 1990s, Indian Airlines had to take permission of the Gujarat High Court every time it wanted to revise airfares, recalls T V Dorairaj, retired general manager. This was due to a writ petition by consumer activist Manubhai Shah. The life of air passengers was different in the 1970s. […]

White House Issues Report on Big Data and Differential Pricing | The National Law Review

Yesterday the White House released a report discussing how companies are using big data to charge different prices to different customers, a practice known as price discrimination or differential pricing.  The report describes the benefits of big data for sellers and buyers alike, and concludes that many concerns raised by big data and differential pricing […]

Ohio Prohibits Price Optimization | AAIS

Ohio recently became the second state, after Maryland, to explicitly prohibit the use of “price optimization” in the rating of property/casualty insurance policies. Insurers currently using price optimization in Ohio have until March 31, 2015 to submit filings through the System for Electronic Rate and Form Filings (SERFF) to comply with a recent bulletin form […]

Department of Insurance cautions industry on price optimization | Morrow County Sentinel

COLUMBUS — Lieutenant Governor and Department of Insurance Director Mary Taylor has warned Ohio insurers against the use of price optimization that can result in unfair discrimination. Last week, Taylor issued a bulletin to Ohio insurance companies noting that the use of price optimization violates Ohio law. Price optimization is an insurance company’s practice of […]

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 | January 2015

The “Pricer’s Points” blog series provides a forum for pricing professionals to share their insights and experience. Our guest bloggers share their knowledge about specific product or industry challenges, geographic complexities, strategies, tactics, and technologies. This Edition is Sponsored by: Wiser Wiser provides a complete suite of solutions to give retailers, brands, and manufacturers the edge to […]

Is ‘free’ the best way to get loyal customers? | Matt Burnett

The movie you watch will be the same regardless of where you watch it. There are some ways to differentiate, such as, with luxury seating, advanced screenings, free parking etc. But when that isn’t enough then resorting to giving a free screening after x number of ticket purchases might not be too bad a thing. […]

Pricer’s Points: Four Cloud Pricing Plans | Khaled Samy Hall

Understanding the Cloud Computing costs, the deployment models and the service models make creating pricing plans more easy and affordable to the consumers. … Pricing Plans 1- Fixed Recurring Pricing The fixed recurring pricing is the simplest pricing option, it offers a fixed cost per month in which the customer is billed for the same […]

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

 

Top Discussions

Discussion: Coca Cola Ties Pricing to Temperature

Supermarket News Article Coca-Cola wanted to create a compelling value proposition during the summer season in a unique way, Efrain Rosario, Coca-Cola’s director of global customer and commercial leadership, said in a symposium yesterday at the Shopper Marketing Expo. The result: Custom vending machines at theme parks that automatically charged three different prices based on […]

Discussion: Pricing your product or service

Marketing Donut Article How much are you going to charge your customers for your product or service? Getting your pricing right could double your profits at a stroke. Many start-up businesses work out a cost figure for each product and add a modest mark-up – known as cost-plus pricing. While this method is common, it […]

Discussion: Year-End Price Discounts: Is This a Good Idea?

The Sales Hunter Blog Unless you’re confident you can make up the volume you’ve moved forward, the only thing you’ve done is create another problem that you will need to deal with. First, if you must offer a discount to make the year-end number, offer the discount to a customer or group of customers in […]

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.

Getting Started with Conjoint Analysis – Strategies for Product Design & Pricing Research

Summary: Ask people what they want, and they say, “the best of everything.” Ask them what they would like to spend, and they say, “as little as possible.” Assessing consumer preferences and willingness to pay through direct rating scales, with separate questions about product features and prices, often fails to capture trade-offs that underlie consumer […]

Guide to Contract Pricing – Cost &Price Analysis for Contractors, Subcontractors, & Government Agencies (5th edition)

Summary: This master reference in its fifth edition contains everything you need to know about government pricing rules and regulations in one easy-to-use volume. Guide to Contract Pricing: Cost and Price Analysis for Contractors, Subcontractors, and Government Agencies, 5th Edition, explains how the government conducts business and walks you through every step of the contracting […]

Harvard Business Review on Pricing

Summary: Finding the right price for your product or service often feels more like an art than a science. Price a product too high and you may limit your market. Price too low and not only will you leave money on the table, you may damage your brand or, even worse, ignite a competitive price […]

Click here for more top pricing books.

 

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.

“Accept certain inalienable truths: Prices will rise. Politicians will philander. You, too, will get old. And when you do, you’ll fantasize that when you were young, prices were reasonable, politicians were noble, and children respected their elders.”

     – Mary Schmich

 

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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