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This Week in Pricing > 8/30/14

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:

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…

The Week’s Top Headlines

Strategies – 4 steps to determine what price is right | USA Today

“How much should I charge?” is one of the toughest questions when you’re starting a small business or launching a new product or service. It can be particularly tough when yours is a service business — should I charge $50 for a haircut or $150? — but even when selling a product, determining the […]

Pricing for Profits – Three Simple Rules to Price your Product | Inc.com

Most entrepreneurs struggle with figuring out how to price their product or service. Price too high and you can count your customers on one hand. Price too low and you risk never making a profit. Here are three simple rules that we have used at Farmivore that can help you get started: 1. Know Thy […]

How to Lower Your Price Without Lowering Your Price | The Sales Hunter

The sales call was not perfect. You’re about to close the sale and you get hit with the issue your price is too high. No need to panic. Here’s the deal — the cost of what you’re selling is not what you think it is. Your price is driven by the length of time it […]

C-suite Involvement in Pricing – A Hallmark of High Performance | CFO Journal

As companies seek ways to increase profit margins and improve overall business performance in a challenging economic environment, many business leaders are turning to pricing as a discipline to boost their bottom lines. And for good reason, according to findings from a survey conducted by the Deloitte Global Benchmarking Center and Deloitte Consulting LLP that examined […]

Consumers May Soon Be Able to “Name Their Price” | Forbes

A 2013 study from GE Capital identified that customers take 79 days on average to research for major purchases, with 80% of research kicking off on the internet. With this in mind, wouldn’t it be nice if you – the consumer – could identify during this process what price you want to spend on the […]

The Key to Setting and Changing Your Prices (Video) | Entrepreneur.com

You don’t need to have the lowest prices to be the best, he says. The value of your product or service needs to exceed the price you set. The idea, he says, is that the value provided transcends commodity and becomes a needed resource for your customers. “If your value is additional, or if people use […]

This Question Made Me $10,000 in 10 Seconds | Inc.com

Many service providers agonize over how to price their services. If the number is too high, it might scare away potential clients; if it’s too low, you’re providing your services on the cheap. What’s the solution? Ask about the budget before discussing the price. Start the conversation by discussing the client’s specific needs, and scope out, in general […]

Web-Only Merchants – Creating consumer trust with an open pricing model | Internet Retailer

Bob’s Watches lists the buy and sell price for Rolex watches to instill consumer confidence. With an average order value of just under $7,000, a purchase from luxury watch e-retailer Bob’s Watches is not likely an impulse buy. And consumers spending that kind of money on one purchase need to trust the retailer they’re buying from, says […]

Dynamic Pricing for Demonstrable Profits | Electronic Retailer

ER: Are there any risks to this approach? JJ: Dynamic Pricing and offers can certainly incite grumbles among customers who pay more for the same product than a friend. When Amazon first tried this by discounting DVDs for its loyal buyers and charging more to new buyers, it became a public issue and received a […]

Driven – Uber’s Campaign to Run Over Competitors and Win the World | Mashable

Even in the highly competitive on-demand car service space, Uber has developed a reputation for being more cutthroat than the rest. It has defied local laws, shrugged off protests around the world, vilified the taxi establishment, openly mocked competitors and tried to undermine its rivals efforts at various turns. It is more aggressive with its […]

Uber’s Most Important Innovation Isn’t A Car Service: It’s the Pricing Algorithm | MIT Technology Review

Uber’s most important innovation is the way it prices its services. But that innovation has not been unreservedly welcomed by customers. They’re wrong. In the four years since the car service Uber launched, it has been beset by criticism from myriad groups, including city officials annoyed by its sometimes cavalier attitude toward regulation and taxi […]

Pricing Part 3 – How Does A Brand Know When The Price Is Right? | Forbes

But if the product is new to the manufacturer’s line or is in an entirely new category, establishing the MSRP is more difficult.  Many brands will analyze the market and the competitive landscape for the product category to determine where the new product will be positioned.   Some manufacturers lay out a grid with price versus […]

Your Customers Aren’t Cheap. Your Salespeople Are. | The Sales Hunter

Salespeople are allowing themselves to believe the discount is essential.  It’s time we stop the madness.  We have to really challenge ourselves to understand why discounts are being offered at all. As I already said, the biggest issue is the salesperson isn’t taking the time to truly understand the customer’s needs.  The salesperson is not […]

Ticket Pricing Cannot Be Undercut by the Marketing Department | Ticketing Today

No good deed goes unpunished in ticket pricing, especially when marketing departments decide to generate sales by slashing prices. This occurs too often via online daily-deal sites and other shortchange efforts that harm the sales environment. When little accountability exists for the marketing department, it creates a vortex that can spark conflict between customers and […]

Please Don’t Let Your CEO Negotiate Price | Pragmatic Pricing

You’re on the edge of closing a huge deal. Your salespeople have done a great job of selling value. They have convinced the buyers and the users that yours is the right solution for their company. All is on track. Then, of course, purchasing gets involved to get a better deal and mostly a lower […]

Magazine Pricing Still an Opportunity for Improvement | Mequoda Daily

From throw-away products to bundles to universal pricing, magazine publishers are still all over the map Magazine pricing strategy has certainly evolved quickly over the past year. In 2013, we still believed that universal pricing was the best way to handle print, website and tablet products. Today, we’ve evolved our own thinking and our new […]

The Psychology of Pricing and Discounts for E-commerce | PrestaShop

In the world of online retail, understanding how to run successful promotions and strategically price products takes more than just an Economics Supply and Demand course. Humans have an innate inclination to respond to certain types of prices, this is what we call psychological pricing. The psychology of pricing and discounts for e-commerce are proven […]

Choosing Your Ecommerce Pricing Strategy | Sellbrite

I could write a book on this one word alone. Pricing can make a business, it can break a business, and it can also drive business owners insane. There’s often no rhyme or reason to prices that work vs. prices that don’t work – every single business (and shopper) out there does things a little […]

Yes, I Paid $8.44 For a Diet Coke – Ethics and Philosophy of Pricing | Jeff Haden

I totally understand the concept of value pricing: a one-hour sitdown with Warren Buffett is worth a lot more than a session with the financial adviser down the street. Even so, the price of a can of Diet Coke is, depending on the setting, fairly well established. So when value boundaries are in large part […]

Price Elasticity Has Snapped | Strategy + Business

In short, price is neither a simple input variable for a model, nor is the outcome as simplistic as just aggregate sales. Price can no longer be managed by a price elasticity model. The elastic has snapped. What then do we replace it with? The details will vary from one company to the next, depending […]

SAP takes steps to simplify pricing and licensing | PCWorld

It took some time and considerable internal effort, but SAP says it has made good on a pledge to simplify its software pricing and licensing model. SAP customers for years have said the company’s pricing is too complex. In October 2012, then co-CEO Jim Hagemann Snabe told IDG News Service the company had heard customers’ […]

Walmart Savings Catcher and the Future of Everyday Low Price | Gartner

Consumers are increasingly sensitive to pricing, including multichannel consistency and competitive fairness. In fact, trust is increasingly a driver of loyalty. Having built its business model on being the low price leader Walmart will be challenged to ensure that they are meeting this customer expectation. The elephant in the room is of course the extensive […]

[Infographic] MAP vs. MSRP: Manufacturer Brands Online Pricing Strategies | Shopatron

In a recent blog post, we explored the topic of minimum advertised price (MAP) versus manufacturer’s suggested retail price (MSRP). It goes without saying, pricing strategy is paramount when it comes to brand management and growth. To further reinforce the value of different pricing strategies, we took a look at several branded manufacturers on the Shopatron […]

The ‘iPhone 6′ Could Be A Whole Lot More Expensive | Huffington Post

Here’s one reality about the new iPhone that Apple fans might not be so excited about: It might be the priciest iPhone yet. Many expect the so-called iPhone 6 to be a complete overhaul of the 5S, packed with several new features that could push costs up. Back in April, Jeffries analyst Peter Misek said […]

Sydney convenience stores under fire for not showing prices | Sydney Morning Herald

Sydney’s central business district is becoming dominated by chain convenience stores that are charging triple supermarket prices for some essentials but often do not display prices on shelves. Time-poor shoppers may be willing to pay for convenience. But one consumer advocate has warned about the possibility of price-gouging at stores that do not display prices, such […]

T-Mobile responds to Sprint’s $60 Unlimited everything plan with more ‘offers and Uncarrier moves’ next week | Tech Times

The battle has only just begun for America’s third and fourth largest mobile carrier. Following Sprint’s announcement to stop pursuing its acquisition of T-Mobile due to regulatory issues, the two companies have not stopped throwing punches at each other. The latest comes from T-Mobile’s famously outspoken CEO John Legere, who promised in a blog post […]

Consumers winning as Sprint wages price cutting war | Yahoo Finance

Regulators have been shooting down wireless carrier mergers lately, and the results for consumers have been terrific, at least so far. This week Sprint (S), the third-largest carrier, is slashing prices and offering one of the best deals on the market for families that use lots of data. Or, at least for families that use […]

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: 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 […]

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 […]

Top Discussions

Discussion: Google Is Working On Airfare Price Comparison Tool That Will Blow Everyone Out Of That Water

Business Insider Article The company has shared its pricing information with the company, which is developing a service that will display fares without bias and then direct customers to third party sites where they can buy tickets. “Google will say, ‘Here are the fares,’ then you click straight through to Ryanair or someone else. It […]

Discussion: What Happens When You Lower Your Prices?

Pricing News LinkedIn Discussion Group Discussion Besides this immediate, leveraged impact that a price cut has on profitability, proper pricing is also essential for any salesperson looking beyond just this quarter’s quota. A price cut may help close business today, but it only makes future sales even harder, because of the effect it has on […]

Discussion: We raised prices to preserve our business model

Iterative Path Blog This quote comes to us from Ms. Allie Webb, the Founder and CEO of Drybar a blow dry only salon. A blow dry salon is not like any hair salon. It offers, just as name indicates, blow dry and styling. Drybar is a pioneer in this niche and does $40 million in […]

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: 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 […]


Innovation in Pricing

Summary: Pricing has a substantial and immediate impact on profitability. Most companies, however, still use costs or competition as a main basis for setting prices. Product or business model innovation has a high priority for many companies whereas innovation in pricing has received scant attention. This book examines how innovation in pricing can drive profits.

Islands of Profit in a Sea of Red Ink – Why 40% of Your Business is Unprofitable & How to Fix It

Summary: Top companies around the world turn to MIT’s Jonathan Byrnes to figure out where the profit is. Using his systematic process for analyzing profitability, they can quickly determine which parts of the business are worth expanding and which are just a drain on resources.

Issues in Pricing – Theory & Research

Summary: A comprehensive and deliberative examination of existing research on pricing. The books authors are some of the leading scholars in the fields of marketing.


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.



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.

“You can determine the strength of a business over time by the amount of agony they go through in raising prices.”

     – Warren Buffett

“There is scarcely anything in the world that some man cannot make a little worse, and sell a little more cheaply. The person who buys on price alone is this man’s lawful prey.”

     – John Ruskin

Other Resources

VIDEO: SALES TIP – Number One Way to Avoid a Discount | The Sales Hunter

Do you really believe you can’t sell without a discount? I argue that if you are always defaulting to using a discount, then you are not really selling.  I hear from people all the time who ask me, “How do I sell without discounting?!” You have to stop thinking that your customers are buying, when in reality they …

Report: European Pricing Maturity Study | EPP

Pricing power is one of the key ways that businesses can create value for themselves. Improving a company’s approach to pricing leads to more opportunities to create and capture value for customers, which results in increased sales and healthier margins. Developing pricing maturity takes time and effort, but understanding how to capture what customers perceive …

Paper: Pricing on Purpose – How to Implement Value Pricing in Your Firm, Parts I-III | IFAC

Part I explains the rationale and underlying theories that support the switch from hourly to value pricing. Part II dicusses early challenges and practical steps to take when beginning to transition your accounting practice to a pricing model based on value. Part III outlines the 8 steps an accounting practice or firm should take to …

Training: Online Courses | Stephan Liozu

Please find below the links to several online courses prepared for Professional Pricing Society as well as free-of-charge webinars on the themes of value and pricing. SAMA: Value Quantification in Strategic Account Management (Registration Required) – 2013 SAMA: Value Quantification – Working on Economic Value Estimation (Registration Required) – 2013 Pros Pricing: is it Time …

Certification: Change Agent in Pricing (CAP™)

The CAP™ certification is a one-day or two-day formal certification program on the change management and the change leadership processes related to value and pricing projects. During this program, participants will learn: To recognize the need for change leadership in pricing projects. To design a powerful change management toolbox for their pricing projects.

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.

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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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