Archives posted in: Pricing

The Process for Pricing Innovation

By Tim J. Smith, PhD February 23, 2018

A good pricing decision is two-fold: One defines an aspirational list price and a commercial policy that deducts from this list price known discounts, which lead to the expected target prices by customer segment and perhaps channel.

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Changing of the Pricing Guards

By Mary DeBoni February 23, 2018

If you can successfully explain why implementing a value-based pricing strategy will be instrumental in moving your company towards their goals and targets, you should be in a pretty good position to get buy-ins.

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Value on the Table vs. Capturable Value

By Tim J. Smith, PhD January 30, 2018

In this article I will review some of the issues engaged and practices suggested by different authors, and then offer the Half-Gains Double-Losses rule to define the capturable value from the economic value to customer and therefore drive a price recommendation for guiding the pricing decision.

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Thinking About a Career in Pricing?

By Mary DeBoni January 28, 2018

Remember, pricing professionals come from a wide variety of backgrounds and the skills needed to be successful can be acquired in many related functions and departments. Just because you don’t have the word pricing in your current title does not mean you are not qualified!

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A Bad Metric for Good Pricing

By Tim J. Smith, PhD December 24, 2017

In this article, we look at how I have often seen pricing improvements measured and why I have some serious reservations with this common metric. I do this in the hopes of generating responses on how you accurately measured the effectiveness of pricing at your company.

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Checking Assumptions

By Kyle T. Westra December 22, 2017

Pricing is not only numbers, but strongly psychological and emotional. Certain norms emerge that dictate how products and services are sold in different industries. Customers come to expect those norms, whether or not they are necessarily the most economically efficient.

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Pricing is Product Management’s Responsibility Too

By Tim J. Smith, PhD November 16, 2017

Product managers undoubtedly can be held accountable for the profitability of their portfolio. It is reasonably possible to make portfolio profitability a key performance indicator of a product manager. And it reasonable to make this part of their compensation package, thus holding them not only accountable but impacting their own economic condition based on the quality of the decisions they make.

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If My Customers are Unique, Why Isn’t their Pricing?

By Mary DeBoni November 16, 2017

Assigning a list price is an arduous task—we want to make sure we get it just right to ensure good margins and profitability. But are we underestimating the importance of one key question? Who is(are) my end user(s) and how are they using my product? If you can think of various answers you may have various customer segments.

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Shaping Customer Behavior Through Commercial Policy

By Tim J. Smith, PhD October 18, 2017

There are two basic approaches businesses take to managing commercial policy. For most, the default approach is tactical decision making. For some, they take the leap and add strategic decision-making.

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Building High Quality Pricing Systems

By Pravin Vemuri October 18, 2017

These systems typically flow into order management systems and are sometimes built on top of them, or contained within them but often they are stand-alone and talk to the order management system through some standard interface (API). The industry term is CPQ (Configure-Price-Quote), also called pricing or quoting engines.

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