value pricing

Do Pricing First, Not Last

Creative people love making things– widgets, software, knowledge, service calls.  A lot of businesses and product lines get started this way.  Someone has a cool idea to make something.  Skeptics shoot down the idea.  The founder or engineer makes it. … Read More

Selling a Commodity for a Premium Price

How can you charge more for a commodity? Here’s one of my favorite examples. 24 ounces of ketchup at $0.07/oz. Turn that idea on its head. 32 ounces at $0.079/oz.  The price per unit goes up almost 13%.  Not bad … Read More

Let Your Customers Do Your Price Optimization For You

Many small business owners consider pricing some kind of dark voodoo that you can only get right with the appropriate incantations, or access to a pricing consultant who knows the right incantations. At risk of hurting my own business, I’m … Read More

How did Netflix raise their prices 60%

Twitter is abuzz with the anguished cries of Netflix customers, many of whom will soon be paying $16 per month instead of $10 per month for movie rentals. Many others have angrily threatened to cancel their subscriptions. Instead of focusing … Read More

Real vs Perceived Value (Seafood Edition)

(Image source: Wikipedia) This is the unattractive and unattractively named Patagonian Toothfish.  You probably haven’t seen it listed on too many menus.  However, some chefs noticed that it cooks really nicely and tastes delicious. But how to get people to … Read More

To Groupon or Not to Groupon?

Groupon has taken the local deal market by storm, growing quickly to $2B in revenue (depending on how you define “revenue”).  The local deals company has also created massive buzz and is now preparing for one of the largest IPOs … Read More

Real vs. Perceived Value

If your maximum price is determined by the perceived differential value of your offering, how do you know what value customers perceive.  Many of them won’t tell you, especially if they think you’ll use that information to jack up the … Read More

3 Ways for Small Business to Price, Which Way is Right?

As a small business owner, you don’t have big pricing departments or teams of PhDs with fancy algorithms to set prices.  Pricing is often the last thing you want to think about (we’ll talk about why this is a big … Read More

First step in running a profitable business: don’t be scared of making money

In my line of work, I encounter a lot of small business owners who set their prices by copying the “going price” in “the market” or by sticking their fingers in the wind.  This is unfortunate, but fixable.  What really … Read More

If you think you’re worth it, but can’t say it…

A lot of businesses think they have a great product or service.  Something above and beyond what the competition offers.  But when it comes time to put a price on all this awesomeness, they are still cheaper than the competition. … Read More