People often ask me what I do and I proudly say, “I’m a pricing expert.” The next question is usually “What do you price?” I have a horrible answer to that question as well. But I can just tell that most people think pricing means putting a price on product. Ugh.
I’m proud of my title, “Chief Pricing Educator” (because I was getting too much spam on LinkedIn from people looking for CEOs). I love being thought of as a pricing expert. After all, pricing is incredibly important, and so few of us understand it.
The problem I have is – pricing is MUCH MUCH bigger than putting a number on an offer.
All pricing experts rely on value-based pricing (VBP). I define this as charge what your buyers are willing to pay. The logical foundation is understanding how and how much buyers value your products.
My favorite technique to help companies is to get them to articulate (with much help) how their customers value their offers. Why do they buy? Why don’t they buy? When companies know this, they can start to price individual buyers. They can effectively price similar buyers using market segments. They can create price segments and execute promotions. All are exceptionally profitable actions, and they are all based on understanding value.
BUT, once they deeply understand value, they make better decisions in other important areas as well. They can guide product teams to build new features and products that buyers will pay more for. (Why would you ever build a product without knowing how much someone would pay for it?). They can help marketers know which messages resonate deeply with their markets. Heck, they may even help redefine their market segments. They can help salespeople more effectively sell the value of their products.
They have the ability to make contributions, beyond pricing, by being the ones that deeply understand value.
I’m considering writing a book on this topic. My problem is, what is a good title? It’s bigger than pricing.
Please make your title suggestions on our LinkedIn post or feel free to send them to me via email. I will share the titles I’m considering in a week, after you’ve had a chance to be creative.
Do you think your job is bigger than pricing? How? Share your comments on the LinkedIn post.
Now, go make an impact!Tags: pricing, pricing foundations, pricing strategies, value-based pricing