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This Week in Pricing > 8/23/14

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.


This Edition is Sponsored by:

The PricingBrew Journal

Whether you’re in sales, marketing, product management or a pricing professional, it’s important to stay up-to-date on the latest practices and research in B2B pricing—and get fresh perspectives and ideas that can help make your business (and career) more profitable.


Use coupon code “PricingNews” to get one month free on any subscription package.

The Week’s Top Headlines

Are You Asking Customers to Buy or Invest? | The Sales Hunter

How do your customers define “best price” or “lowest price?” I was conducting a training session for a major company on how to sell at a higher price, and one of the first questions I was asked was how to deal with a customer who was only concerned about price. One salesperson asked me the […]

You Are Leaving Money On The Table – The Secrets Of Pricing | Forbes

Oscar Wilde said that a cynic is a “a man who knows the price of everything and the value of nothing.” A startup CEO should know both. One of the most powerful levers a CEO has to impact profitability is pricing. Typically, a 1% price increase has more than twice the impact on profit of […]

4 Simple Ways to Convince Price Sensitive Customers | ClinchPad

It’s when you decouple price sensitivity from your product or service is when you become a revenue rocket. However, that’s something that takes careful analysis and an extreme makeover of how your entire sales team collaborates. Measuring how sensitive your audience is about price is the first logical step. Measuring Price Sensitivity When it comes […]

Psychological Pricing | Boundless

Psychological pricing is a marketing practice based on the theory that certain prices have meaning to many buyers. KEY POINTS Products and services frequently have customary prices in the minds of consumers. A customary price is one that customers identify with particular items. Odd prices appear to represent bargains or savings and therefore encourage buying. […]

Are We Ready for Persona Based Pricing? | Get Smart Content

What is Persona Based Pricing? Persona based pricing, sometimes called dynamic pricing, is the practice of changing the price displayed on a website based on information known about the visitor.  Variable pricing is nothing new.  For decades brick and mortar stores have priced products differently in different zip codes or regions of the country.  Sports […]

What happens when shoppers pick their own prices? |CBS News

Radiohead singer Thom Yorke has said the band made more money from digital downloads of “In Rainbows” than for all of its other albums, the team wrote. Radiohead’s unusual pricing strategy for the album earned it considerable media attention, which may have also helped drive sales. And yet even though digital sales spiked, there was […]

Could “dim pricing” be the financial savior for the LTL sector? | Logistics Management

Just under the radar, LTL carriers are rapidly investing in expensive, on-dock, three-dimensional size measurement capturing machinery. LTL carriers are hoping one day of being able to more accurately charge shippers rates based on the actual dimensions of their shipments, rather than the traditional weight-and-distance-based formula that has been in effect since the 1930s or […]

Are Discounts Hurting Your Business’s Profitability? | Business Know-How

Continual Price Deductions and the Lessening of Customer Devotion In addition to eroding margins and a lack of insight relating to future customer tendencies, regular reductions may well also cause your buyers’ devotion to diminish. In the same way your customers are faithful to particular brand names, so too are they devoted to your shop; […]

That Gorgeous Dress Too Expensive? New Website Lets You Name Your Price | Fast Company

A NEW WEBSITE FROM A COUPLE MIT GRADS LETS CUSTOMERS HAGGLE FOR HIGH-END, LOCALLY MADE PRODUCTS. Haggling is an age-old tradition at marketplaces around the world, but price negotiations between merchants and buyers haven’t quite made their way into the world of e-commerce. Theorem, a San Francisco-based startup headed by MIT grads Ryan Jackson and Adam Roberts, is trying to […]

Sticky pricing – Prices Quick To Rise Slow To Fall | Consumer Reports

If you follow the news, you’ve probably heard that the cost of gasoline has dropped significantly after reaching a six-year seasonal high in June. But if you’re like me, you probably wonder why actual prices at the pump don’t seem to be falling nearly as rapidly as they should. Back in 2010, the Federal Trade […]

Freelance pros take the zeros out of project bids. Here’s why. | Freelancers Union

What would happen if you quoted them a price of $5,180? I bet your client would be happier. A specific number has greater meaning because it looks like you calculated your cost exactly. You took the time to break down all the custom component costs, and come up with a number for their needs — […]

The Drink Exchange – Bar Dynamic Pricing | YB & ASSOC

The Drink Exchange brings a new perspective and pricing strategy to the market, the dynamic pricing model, used already by leading businesses within the hospitality, travel, entertainment and retail industry, is now accessible for bars. Bars owners remain constantly competitive by changing prices based on current demands and other factors, altogether supported by algorithms – […]

Dynamic Pricing – look before you leap | COMMVIA

Dynamic pricing takes this to whole new level and for online only businesses could mean a price change several times a day as events unfold. Its a great technical solution to increasing margin and potentially sales but it just seems to have overlooked one tiny problem area. Consumers are not yet happy with the idea. If you’ve […]

Random Charges by Big Businesses “Dynamic Pricing” | The LRB

The businesses who randomly asked for payment to a minority of subscribers, or who have randomly charged a fee to all or some of its users, might be doing so in a legal method of randomized pricing fluctuation. Examples: increases such as in the case of Netflix (2011) for seemingly valid but invalid purposes, and […]

How Ridesharing App Sidecar Competes With Uber & Lyft With A Unique Pricing Model | Growth Everywhere

Differentiating your product in a competitive marketplace Although Sidecar is similar to Lyft and Uber, there are key differences. Sidecar pioneered a new category within an emerging market where drivers can set own prices and showcase what they’re capable of while competing for the best price. Meanwhile, riders get to choose the driver they want. The result […]

Uber dynamic pricing could make it very expensive to get to Paul McCartney’s concert | abc7news.com

SAN FRANCISCO (KGO) — Sir Paul McCartney takes the stage at Candlestick Park Thursday night for stadium’s final act. For those trying to get there, the evening could get pretty pricey if you’re booking a ride to or from the show with an on-demand car service like Uber. “I’m under the impression that it’s supposed […]

Uber car service twists sharing economy into ‘sucker’s economy’ | MarketWatch

Fans at a San Francisco music festival last weekend got a rude awakening in how much Uber and other car services can cost in times of high demand, illustrating the misnomer of the so-called sharing economy, when what these companies are creating at times is a “sucker’s economy.” According to Gawker’s ValleyWag , some customers in San […]

Uber’s dynamic pricing is a feature, not a bug | Economic Sophisms

One of the great features of Uber’s dynamic pricing is that there will nearly always be a ride available at some price. In Manhattan and got a pregnant wife about to give birth in The Blizzard of the Century? For $1500 maybe you can get a ride to the hospital. Having that option seems to […]

Car hire prices ‘unfairly vary’ across EU | BBC News

Drivers are being charged different prices online for the same car rental based on where they live in Europe, the European Commission has said. Charges vary for some motorists, even if they are picking up the same vehicle from the same location and from the same hire company. The Commission said that price discrimination based […]

Amazon Goes After Square in the Way It Knows Best – Pricing | Re/code

Amazon is charging $10 for the card-reading dongle, which can be plugged into iOS, Amazon and a handful of Android phones and tablets to accept payments through an app called Amazon Local Register. The app will include features to help business owners track sales. For anyone who follows Amazon, the fact that the company is […]

Why Do Some Self-Published Authors Care How Hachette Prices Its Books? | Digital Book World

One of the most confusing things to me about the Amazon-Hachette contract dispute saga is why do so many indie authors want so passionately for Hachette, a competitor, to lower its prices? Isn’t it against their self-interest? Don’t indie authors, who generally price their books lower than traditionally published books are priced, benefit from a […]

Cargo Rates Trigger Shipper Backlash as US Rails Soar | Transport Topics

After CSX Corp. raised rates for shipping specialty gas by 41% over three years, Diversified CPC International Inc. had to shutter a production line near Chicago. The buyer of a custom-ordered Diversified gas didn’t want the expense from those freight bills, so it decided to bring the manufacturing in-house. “We kept cautioning the railroad and […]

CHART OF THE DAY – How Apple’s Smartphone Strategy Is Different Than Everyone Else’s | Business Insider

Market research firm IDC published some really interesting data on Thursday that breaks down the smartphone market share by price. According to that data, which was charted for us by Statista, more than 80% of Apple’s devices are “high-end,” as they cost more than $400. Less than 20% of Apple smartphones are considered “mid-range,” and […]

10 things getting more expensive this fall | Yahoo Finance

Get your wallets ready, because fall will be here before you know it. The season brings its own list of expenses: Kids need school supplies and college students need new textbooks and computers. It will soon be time to put the shorts away and see if the fall wardrobe needs refreshing. Windows will close and, […]

Cancer – Unpronounceable Drugs, Incomprehensible Prices | Forbes

Differences in clinical outcomes in some cases might explain this pricing paradox, but the two drugs have not been directly compared.  Anyway, the FDA says Xalkori, not Zykadia, is the first choice for this subgroup of lung cancer patients.  Zykadia is for what experts call ‘second line treatment’.  The response rates, a measure of the […]

Why textbooks cost so much | The Economist

STUDENTS can learn a lot about economics when they buy Greg Mankiw’s “Principles of Economics”—even if they don’t read it. Like many popular textbooks, it is horribly expensive: $292.17 on Amazon. Indeed, the nominal price of textbooks has risen more than fifteenfold since 1970, three times the rate of inflation (see chart). Like doctors prescribing drugs, professors […]

China Says Mercedes-Benz Violated Antitrust Rules in Pricing | NYTimes

HONG KONG — Government investigators in China have found the Mercedes-Benz unit of Daimler, the German automaker, in violation of antitrust price rules, the Chinese state news media reported on Monday. The announcement was the latest in a spate of inquiries over pricing and sales policies that have raised pressure on foreign corporations across China. The price […]

Recommended Resources


Webcast: Learn How Harry Cooper Supply Uses Strategic Pricing Tools to Identify and Capture Available Margin Premiums | SPA

Thursday, September 11, 2014 2:00 PM Eastern Register to attend our webcast that starts at 2:00 PM EST where Larry McMullin, CFO at Harry Cooper Supply will share their journey to pricing excellence and how they are leveraging science-based strategic pricing tools to identify and capture available margin. To implement a solution that enhanced profitability, […]

Pricer’s Points Blogs

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 […]

Pricer’s Points: A is for Attribute-based pricing | Ben Blaney

In attributes-based pricing, we’re trying to key in on essential pieces of meta-data – attributes – that will tell us something about the customer, the product, the geography, or the deal (or a whole bunch of other things) to help us price correctly. (you’ll notice I said “correctly”, not “ludicrously high”) First, let’s think about […]

Pricer’s Points: Why the Message of Pricing Hasn’t Spread Wider | David Mok

Pricing as a profession has come a long way – from a role that has evolved out of someone’s part-time job (marketing, finance, contracting, etc.), and that wasn’t long ago, to a full-time profession accompanied by a title having the word PRICING in it. I happen to be one of those fellows who has been a part of […]

Top Discussions

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, […]

Discussion: Uber CEO Explains The Company’s Taxi-Killing Pricing Formula

Business Insider Article When was the last time you saw a pricing strategy completely alter an industry? Uber is upending 2 segments – the black car and taxi of the transportation industry. An innovative way to order and bill car service. Top Comments Scott Francis President, Strategic Pricing Solutions Uber is providing some interesting tests. […]

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: Four Reasons Why Your Salespeople Discount

Pragmatic Pricing Blog Of course sometimes sales really needs to discount in order to close the deal. If we want the business we need to discount. However, this then becomes an easy excuse for why we discount every deal. If you want to reduce discounting by your sales force, address these four issues: price fairly, […]

Discussion: The Power of Pricing: How to Improve Your Pricing and Profits

Vistage Executive Street Blog Your sales team defines price as what’s on the invoice. Your CFO defines price as ‘what we take to the bank’. Your customer says price is too high. Your pricing manager says that price doesn’t match our standard terms. Your distributor says they can’t make any money on your line. And […]


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 […]

Impact Pricing – Your Blueprint for Driving Profits

Summary: Pricing strategist Mark Stiving dares you to take a fresh look at the framework behind your product price, and asks—how can you make a greater impact? Stiving empowers you to revaluate your pricing approach, urging you to stop focusing on price as a means to sell and start focusing on price as a tool […]

Implementing Value Pricing – A Radical Business Model for Professional Firms

Summary: An overwhelming majority of pro-fessional firms price their services by the flawed hourly billing method. This method is outdated, suboptimal, and driving the best and brightest out of the professions. While lawyers, accountants, and consultants serve noble callings, the predominant method of pricing for their services is not worthy of them. There is a […]


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.

Organizational Challenges


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.

“The value of money comes from the private sector in the form of price for product, services rendered, what people are willing to pay for something they want or need. That’s where value happens.”

    – Rush Limbaugh

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

     – Ron Johnson

Other Resources

Report: Rebuilding Profits in the Manufacturing Sector – How to manage profits and pricing | Deloitte

Executives at manufacturing companies face constant pressure to lower costs, irrespective of the economic conditions. The manufacturers who succeed (as opposed to simply survive) will likely be the ones who focus as aggressively on the other side of the profit equation — driving revenues. Managing the revenue side of the profit equation can be easier […]

Video: The Wicked Sick Project – BMX

A rad to the power of sick test that sets out to prove the power of creativity by George Patterson Y&R Melbourne. We bought a BMX off ebay, then sold it again on ebay but added creativity…

Paper: The power of pricing – How to make an impact on the bottom line | PWC

The majority of companies already recognise the potential for achieving growth through improved pricing. Understanding their customers and being able to react to them is often what drives pricing, yet in reality a very small proportion (13%) have an in-depth understanding of what their customers value and what they’re willing to pay.

Paper: 7 Popular Pricing Paradigms | Fusebill

A Complimentary Whitepaper from fusebill SUBMIT THE FORM BELOW TO DOWNLOAD YOUR COPY OF THIS WHITEPAPER… Significant changes are being seen in how businesses are pricing their products and services in direct response to changes in customer demand and behavior.

Certification: Customer Value Modeling (CVM™)

The CVM™ certification is a one-day formal certification program on the customer value modeling methodology using the Economic Value Estimation® process. During this program, participants will learn: To identify true product and service differentiators. To select the right value drivers for a customer value model.

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.

The PricingBrew Journal

Whether you’re in sales, marketing, product management or a pricing professional, it’s important to stay up-to-date on the latest practices and research in B2B pricing—and get fresh perspectives and ideas that can help make your business (and career) more profitable.

The PricingBrew Journal is the only publication of its kind, providing a regular dose of real-world experience and insight from the PricingBrew research team and a global network of seasoned B2B pricing professionals and consultants. Every two weeks, subscribers get access to in-depth articles, training, research, best practices, case studies, expert interviews and educational webinars.

use coupon code “PricingNews” to get one month free on any subscription package >

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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