Posts by: Tim J. Smith, PhD
Value-based pricing aims to price offerings according to the value customers’ associate with the offering in comparison to its alternatives. This is a…
MoreValue-based pricing aims for prices to reflect the value customers associate with a product or service offering. Simple enough to state, but what does this mean?
More“Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.” -Warren Buffett The…
MoreI was asked at Riot Fest Chicago what I did and chose “Economics” as my answer for the moment. He continued: “Micro…
MoreIn Econ 101, we are taught that lower prices lead to higher sales volumes. In sales, we hear directly from customers that the prices are high and they want a discount. And in marketing communications, we learn to “sweeten the offer” in promotions and advertising. But is price really the most important driver to customer purchasing behavior?
More“If you know the enemy and know yourself, you need not fear the result of a hundred battles.” –Sun Tzu, The Art…
MoreIn free markets, competition is the norm, not the exception, and that competition will limit your latitude for pricing. When competitors lower prices or new competition enters at a lower price, many a novice manager’s gut reaction is to lower prices—but the cost of price concessions may be higher than the cost of customer losses. Experience will temper these beginner instincts over time, but there must be easier and less costly ways to identify the proper reaction to competitive price moves… Enter the Strategic Pricing Reaction Matrix.
More“Do not do what someone else could do as well as you. Do not say, do not write what someone else could…
MoreRebates, discounts, and other forms of incentives are common parts of customer loyalty programs. Done right, they improve the profitability of the…
MoreConsistently profitable decision-making isn’t based on luck. It isn’t based on being or having the smartest person on your team, either. It’s…
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