Cut costs without hurting sales. Raise prices (nominally, by raising list prices, or effectively, by reducing discounts) without hurting sales. Ummm, ummm. What’s the 3rd one? Costs… prices… and the 3rd one, let’s see… No sir, no sir. And the 3rd one, I can’t. Sorry. Ooops.
I get a lot of questions about price optimization, so I just wanted to make it really simple. Write down your costs. Of course, you won’t know your real costs, so just use estimates, preferably from 2-5 years ago. These costs won’t include much nuance about fixed overhead, variable costs, service costs, customer acquisition, or [...]
Sadly, this will seem awfully familiar to some businesses we’ve seen.
Twas the night before Christmas, when all the through the houseNot a hard drive was stirring, not even a mouse. The pipeline reports were tallied with careIn hopes that the revenue soon would be there. The sales teams were in hotel rooms, snug in their bedsWhile visions of commissions danced in their heads The CFO [...]
Pricing humor from Slingblade, courtesy of an alert reader. Linda Wheatley: Karl, you know what? Melinda here was voted employee of the month at the dollar store last February. Isn’t that something? Karl: Yes ma’am, I reckon. Melinda: Well, when you like pricing items as much as I do, it’s just bound to happen sooner [...]
While the economy as a whole risks deflation, there was one area with strong pricing power. According to PNC’s annual survey the cost of hiring lords a’leaping, buying partridges, pear trees, and other accoutrements of the 12 Days of Christmas rose 8.1% to $21,080. The swans account for about 25% of the overall cost, which [...]
Generally, per-unit prices go down as volumes go up. This is not always the case, however. Occasionally, whether by accident or as a tax on the mathematically disinclined, you’ll see something like this:(From The Consumerist, which includes another, even more egregious example in one of the comments.)
We’ve had other discussions about how for some luxury goods, the exorbitant price is part of the value (see $300,000 watches that only tell you whether it’s day or night). Meanwhile, as some of you may have heard, Apple launched a new iPhone, along with the AppStore, which allows iPhone owners to install applications, much [...]
So much of pricing is about choosing the right metric. In other words, the dollars per what? Gasoline is priced in dollars per gallon (or per half gallon in some cases where the pumps can’t display prices above $3.999– how much do you think you can charge for the upgrade kit?). A lot of software [...]
I’m heading to San Diego today to do a workshop on Measuring the Efficiency and Effectiveness of Pricing. Believe it or not, this will be a fun 2 days for me and the other participants. One of things that is most challenging about pricing is that it’s so hard to measure. Which is why I [...]
