Pricing decisions are make or break decisions for a company. When made using a structured process and when executed competently, they can propel it towards sustained differentiation, rapid growth, healthy profits, satisfied customers, and engaged employees.
But if pricing is done haphazardly, using old traditions or with cookie-cutter methods, it can lead to lost opportunity. Defective pricing fritters away a company’s competitive advantage, leaving customers irate, employees confused, and sales in a freefall.
How To Price Effectively introduces the value pricing framework, a structured, versatile, and comprehensive method for making good pricing decisions and executing them. The framework weaves together the latest thinking from academic research journals, proven best practices from the leading pricing experts, and ideas from other fields such as medical decision making, consumer behavior, and organizational psychology.
How To Price Effectively describes what a good pricing decision is, which factors you should consider when making one, the role played by each factor―costs, customer value, reference prices, and the value proposition― and how they work together, the importance of price execution, and how to evaluate the success of pricing decisions. You will also be introduced to a set of useful and straightforward tools to implement the value pricing framework, and study many examples and company case studies that illustrate its nuances. This book will provide you with a comprehensive, practical guide to making, executing, and evaluating pricing decisions.