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Pricing For Profitability

Increasing Prices by 1% Can Increase Profits by 8.7%

Pricing Strategies we UseThat’s a pretty powerful concept.  But in a competitive environment you can’t just keep raising prices.  At some point customers will stop buying.  The key is to find the balance point where you maximize profitability.

Pricing Gurus helps companies take a scientific approach to determine what prices to charge.  We have been in scenarios where price was determined by increases in product cost, begging of the sales team and the whim of the CEO.  These are inefficient processes that risk company revenues and drive your customers crazy.  There are better ways to do this.

Practical Pricing Guidance to Fit Your Needs

We don’t try to boil the ocean!  Pricing Gurus focuses on providing small and medium sized companies with affordable practical pricing guidance.  Our experience comes from working with companies such as Microsoft, Intel, Honeywell, IBM and HP.  Combining that experience with a deep understanding of the business world and marketing savvy helps provide actionable advice for your individual  situation.  We help companies during the front-end of the product development process which is the right time to think about price. We also dive in at the back end when things start running amok.  Learn more about us.

How We Do It

Pricing Gurus uses scientific research to take the guesswork out of the pricing process.  We work with you to define key market and product assumptions.  For example – what specific features do your customers value?  What are they willing to pay for them?   And conversely – what are they not willing to pay for.  We then go and gather solid customer and market research to support or negate these assumptions.   Using a holistic marketing approach, we help determine the best set of strategies to implement.  Equally important is developing and rolling out strategies to communicate new price and value propositions.  This helps ensure customers feel they are getting their money’s worth.  Examining sales channel efficiencies to look for improvements rounds out the overall process.  Learn more about the pricing process we use.

*Global 1200 average income statements 2010, trailing 5 years

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Pricing Posts

  • Are you pricing based on cost rather than value? Why?
    At Pricing Gurus, we believe that value-based pricing allows companies to achieve higher profitability and a better competitive position. Some companies disagree with that perspective, or feel they are stuck with cost-based pricing. Let's explore a few reasons why value-based pricing is generally superior.
  • Dutch ovens: paying a lot more means better value
    An article on Dutch ovens in the September/October 2018 of Cook’s Illustrated gives food for thought (pun intended) about the relationship of between price and value. Sometimes higher value for a buyer means paying a lot more money – good news for the seller too. Dutch ovens (also known as casseroles or cocottes) are multipurpose,
  • Methow Valley Ski Trails gets pricing right
    The Methow Valley is a remote area in Eastern Washington State. It’s a destination recreation area year-round, and even more so in the winter when the North Cascades Highway is closed making a circular drive impossible. I’ve enjoyed skiing the trails in the Methow Valley on a number of occasions, and on a recent visit
  • This survey Hertz: lack of thought
    I recently took a survey sponsored by the Hertz Corporation, intended to assess the appeal of several new approaches to services. This post discusses some of the problems I found, and why you should avoid creating your surveys like this one.
  • When More is More: taking advantage of purchaser (mis)understanding of discounts.
    Should you offer a discount to kick start sales of a new product? Or to revive sales of a forgotten product or service? Pricing Gurus recommends you hold the line and treat discounts as temporary, lest you simply lower the prices.
  • Pricing Innovations – A Tale of Two Companies
    Being innovative in pricing takes some good old-fashioned marketing work. You not only have to understand the value that you are delivering, but you also have to understand the personas that make up your customer base. Pricing Gurus has been tracking two companies that made significant innovative changes in their pricing structure: J.C. Penney and
  • Van Westendorp pricing (the Price Sensitivity Meter)
    Practitioner’s guide for those conducting their own pricing research, focusing on the Van Westendorp Price Sensitivity Meter.
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