I’m working on a new program to teach pricing called “Stop Pissing Away Your Pricing Power”…
Pricing Power matters because it enables you to:
Maximize profitability
Maintain brand equity (you have to build some first, obviously)
Create short cuts for your customers so that they make quicker buying decisions
This morning, I wanted to prime your pricing thinking by offering up 7 principles of effective pricing
- Price = Value: No value, no price integrity.
- Pricing demands research: You need to do better than just sticking your finger in the air and hoping to get the right price.
- Price is a story: Are you a commodity? Premium? Value? What?
- Price has a Placebo Effect: Meaning customers feel like they get what they pay for.
- Price is your best profit lever: You can gain 10-12% profit growth just raising your price 1%.
- Pricing is Marketing’s MVP moment: This is where you capture some of the value that you’ve created in the marketing process.
- Discounts are for Dummies: Bad business 101. Discounts can cost you a lot of profit (up to 40% in examples I’ve seen), brand equity, customer loyalty, sales, and more.
- These principles aren’t in order. If I needed to put one as number 1, I’d say that pricing is marketing’s MVP moment. Keep that one in mind, but hold all 7 of these products close to mind.