Our Pricing Process

We Take the Guesswork out of the Pricing Process

Guessing what the price should be on the day of product launch is not where you want to be. Yet we’ve seen countless examples in large and small companies where this happens. Product Managers are not often taught how to price or are given the power to price. Usually it takes the sales team asking for the price list to get things started.

To maximize profits, you must understand your competitive environment and the value you deliver. There are scientific methods available to help you get the data needed to make key product and pricing decisions. Once you have the data, we create a pricing strategy that makes sense for your market and aligns with your product strategy.

We ask these key questions as part of our process:

Industry research – what is the demand for the product? What are your competitors doing?
Product research – what features do customers value and are willing to pay a premium price for?
Pricing research – how much are your customers willing to spend?
Product costing – how much does it really cost to deliver that product to a customer?
Product marketing – how do you position your premium vs mid-tier and low-cost products to maximize profitability? What products do you stop selling?
Corporate branding – does your brand and messaging/positioning allow you to charge premium pricing?
Communications – how do you convey the value you are delivering to your customers and sales channel? How do you convey a price increase?

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)
This is a follow up to classes I taught that included a short section on pricing research methodologies. I promised some more details on the Van Westendorp approach, in part because information available online may be confusing, or worse. This article is intended to be a practitioner’s guide for those conducting their own research.