As a pricing analyst in a strategic pricing
group, this is one of the “textbooks” our team reads. Having already read a few books and took
courses on pricing, I kind of thought what else is there to learn? What could I possibly not already know?!?!
This isn’t the most mind-blowing pricing book I
have read. However, I do think among all
the pricing books I’ve came across, this one focuses most on execution and being practical. The importance of price is emphasized many
times through charts and case studies and calculations.
In the “real world,” good data is really hard to
come by. The accuracy tradeoff of data
on costs, pricing, discounts, promotions, rebates… compared to how confident
you are in making a pricing move makes the matter very tricky. For most, it is much easier to choose
inaction instead of taking the risk and potentially owning the results of a
wrong decision (or a right decision with an unfavorable outcome). Real
pricing decisions come with real risks.
Own it like a big boy, buddy.
The analogy of benefits gained by actively
managing price being compared to acquiring another company that is 25 to 50
percent of the original organization’s revenue shows how strong a difference
pricing can make and how often it is overlooked. Pricing is the single most influential lever
a company management can manage.
What I liked most about the book is that instead
of providing beautiful strategies build on clouds that never seem to work in
real life, there are plenty of examples to see how the strategies here work in
the real life. Instead of focusing
solely on customer reactions, the book also shows competition reactions and how
that complicates pricing strategies.
The concept of a Value Equivalence Line in
action was very valuable.
For example, it may seem intuitive to lower
price for a product at the end of its product life cycle. Reasons are to clear inventory, fire-sale, and
introduce the new version.
Strategically, that could be a very wrong move. Read the book and have your mind blown.
It takes a very forward thinking leader with
titanium balls to push this through and own price. But compared with all the stupid shit
companies and leaders often do… The
potential rewards are far greater from having a solid pricing team.
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