Today’s column, my 27th for LeadingCompany, marks the first anniversary of the appearance of this fortnightly column. This milestone makes it an ideal opportunity to pause and reflect.
This column has covered a lot of ground and topics in the 12 months since it was launched. We’ve looked at pricing strategies in consumer and business markets. We’ve looked at industries such as newspapers and putting a price on executive mental health. We’ve looked at the challenges posed by powerful procurement departments, the problems with traditional economic theory, how to execute price changes and why goods should be sold as services.
Four of the columns have generated some really positive feedback from readers. The Warren Buffet School of Pricing has certainly resonated with the LeadingCompany audience. Also popular have been the three columns where I’ve drawn pricing analogies from movies. In “Are You Pricing Like Dennis Denuto?” (the fumbling lawyer from The Castle), I looked at some common pricing traps companies often fall into. In “The pitbull v the peacekeeper” I did what the editor of SmartCompany thought was impossible, and mentioned Gwyneth Paltrow and pricing in the same sentence, and couple of weeks later, explained why Richard Gere made a great pricer.
With the beauty of 20:20 hindsight, would I have changed anything I’ve written over the past 12 months? No, not much. One of my predictions for 2013 was that online pricing intelligence tools and platforms would become firmly entrenched in many retailers’ arsenal this year. That will still happen, but given the emergence of a new service provider seemingly every month, this market is starting to look like a bubble. Select your vendor carefully.
So are companies getting smarter with their pricing? The impact of this humble little column is difficult, if not impossible, to measure, but the answer is probably “yes and no” or “it depends”.
I recently heard a chief executive – who is contemplating a change not only to her pricing model, but also her business model – remark that “It’s only a price: customers will just have to pay it.” But that assumes the sales force can sell the new business model, that prices have been set to reflect the value received, and so on. At the end of the day, customers have choices and they don’t necessarily have to pay your price.
On the other hand, I was recently asked to do a 24-hour turnaround on pricing for a huge contract for a company. Part of the value proposition submitted to the company’s client that was that this fair, equitable and value-based pricing had been developed with the assistance of an independent pricing consultant.
Now there’s a business owner who appreciates the importance of pricing.