Thank you so much for buying my book.
Instant Profits: How to Paise Prices Without Losing Customers. I worked hard to pack 30 years of experience, insights, and know-how into that little book.
Of course, pricing is a BIG topic, it can be complicated and it is always evolving. That’s why I created this site. Think of it as a companion guide to the book. Here you’ll find examples. deep-dives and additional takes on the topics I covered in the book.
And please if there’s something missing, a topic you wish I’d cover here, or even something you’d like to discuss with me directly, please don’t hesitate to reach out to [email protected].
Alleviating Fear
If you haven’t kept up with inflation, you’ve been lowering your price.
Why you need to keep working on your pricing.
Having a clear process minimizes the chances of losing customers.
More on why and how to raise prices.
The Six Core Tenets of Value
BUYERS TRADE MONEY FOR VALUE
Buyers trade money for value
Value may be an ambiguous word, but in B2B it’s pretty clear. Buyers only buy when they think doing so makes them more money. They use ROI.
Increased revenue, decreased costs, and reduced risk.
Economic Value is an academic’s way of saying incremental profit.
Value-based pricing means charging what a customer is willing to pay.
A little more information on this simple definition.
Adding Value-based pricing to whatever model you use today.
Value is measured in incremental profit
Understanding what value means to a buyer is challenging. Value Tables provide a process.
Buyers make purchase decisions based on either inherent value or relative value
A description of Will I and Which one. Will I decisions are based on inherent value. Which one decisions are based on relative value.
You are allowed to charge different prices to different buyers.
Market segmentation is different from price segmentation.
Why price segmentation is so profitable.
Sometimes, you have to work at keeping customers with a higher WTP from buying at lower prices.
Take a look at price segmentation, market segmentation, and product portfolio as three major ways to charge different prices to customers with different WTP.
I’m asked this question every time I teach price segmentation.
Sometimes, price segmentation is seen as a bad thing.
Raise prices on the people, products, and situations with the highest value surplus.
Think about adding value-based pricing to whatever strategy you currently use.
For a major overhaul, this works. But you don’t have to be as thorough.
When to Raise Prices
Losing some deals is good. Definitely more profitable.
It’s a good thing!
When we saw inflation spiking, it was time.
Inflation is not the reason, but it is a great justification for increasing prices.
How Much
A little more detail on how buyers perceive price increases.
A real example of the profit vs. share trade-off.
Who
It is not only OK, it’s profitable to charge different prices to different customers. Here is one example.
Buyers are different. One way is the persona. Understanding how value is different for different personas drives sales, marketing, and profitability.
The best way to minimize churn and get existing customers to accept a price increase.
Net Revenue Retention is a crucial metric in subscription businesses. It’s all about your existing customers.
Raise prices, upsell, cross-sell and usage.
Which Products
Think very hard before claiming your product is a commodity.
Truly unique products don’t have competition.
To existing users, iPhones do not have competition.
What Situations
Sometimes buyers don’t consider a competitive alternative.
Sales Authority
A three blog series directly discussing giving authority to sales:
Salespeople provide blatant hints they are willing to discount. This hurts your ASP and margin.
Getting salespeople to minimize discounts is a price increase.
Discussing the pros and cons of allowing discounting.
Hint: they don’t know it. Neither do you.
Salespeople need to practice not discounting.
When done well, negotiating is a great implementation of price segmentation.
Another perspective on why not to allow it.
Contract Terms
Competition
How to legally “communicate” with competitors.
See how an algorithm raised prices based on competition.
We may be seeing EV manufacturers legally collude on price.
Communicating Price Increases
A pretty good example of a price increase communication
Whenever you communicate price, you must communicate value.
Some good and bad in this price change communication.
Another bad example of a price change announcement.
Netflix has done some horrible and some fabulous price increases. Here is one of their communications.
Another example of communicating higher prices.
Handling Pushback
Have a question on contract terms or a topic you’d like to see covered, reach out to [email protected]
B2B Shrinkflation
Amazon removed the ad-free feature.
Another unusual example of shrinkflation
Here is a description of why shrinkflation works.
Beyond Raising Prices
Pricing people must focus on value. It’s a talent/skill that should be learned by product teams, marketing, and sales too.
Value should drive your product portfolio. And a great portfolio captures more of your buyers’ willingness to pay.
Beyond raising prices, this worksheet helps you find more areas where you can improve your profitability.
Buyers buy Value. Sales and Marketing should be talking about the same thing.
Looking for help implementing these concepts in your business? Let’s chat!
