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The Art of Pricing: How to Find the Hidden Profits to Grow Your Business
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Sales rank 138,149
Customers rating (based on 19 reviews)
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Want to make a bad year better or turn a good year into a blockbuster? Stop leaking profits and discover the untapped gold mine that exists in your products. The Art of Pricing is the first practical, easy-to-understand guide to solving one of the most important dilemmas in business: how to use price to uncover a product’s hidden profits and find new opportunities for growth.When it comes to setting prices for products and services, even the most sophisticated businesspeople often rely on formulas and seat-of-the-pants instinct, based on what the competition is charging, marking up costs, and doing things as they’ve always been done. The result is that businesses of all sizes, from start-ups to the Fortune 100, leave money on the table. In The Art of Pricing, Rafi Mohammed, one of the world’s leading experts on pricing strategy, shows:• The astonishing impact that small changes to a pricing strategy can have on the bottom line• How the right pricing strategy can boost profits and grow your customer base • Why the right way to think about pricing is as a series of easy-to-implement strategies that allow companies to serve and profit from the largest possible customer base• Why the art of pricing involves understanding and capitalizing on the fact that different customer segments are willing to pay different prices for the same product • Why an effective pricing strategy is not about price gouging but one that incorporates fairness into every important pricing decisionThe Art of Pricing will be the invaluable missing link for people running companies, departments, divisions, and product lines, as well as for those in sales and marketing. Dr. Mohammed shows that an effective pricing strategy helps complete the circle by reaping the rewards due for the enormous effort, creativity, and investment made in developing and marketing products and services. Using a range of examples, from neighborhood restaurants to huge companies like Ford, he shows the importance of not falling short—and shortchanging yourself—when it comes to the heretofore little understood art of pricing. Also available as an eBook
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| Publisher | Crown Business | | Release date | 10/2005 | | Availability | Usually ships in 24 hours | | Edition | Hardcover |
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Jack Covert Selects: The Art of Pricing
: Here is a book that is really "where the rubber meets the road": pricing. (@ 800ceoread.com)
Pricing: The Magic Number
: If you don't have a carefully considered pricing strategy, chances are you're leaving money on the table. Here's how to figure out what your prices should be
(@ BusinessWeek Smallbiz)
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Pricing by value
This book was a delightful read not only because it was short and to the point, but also for it's many real-life examples. I've felt for a long time that prices need to be set to the customer's perception of the value of the product or service, so it was very encouraging to read a book where the author was able to break down the reasons and supply applications for this type of pricing he calls "Value pricing". As with an auction (a theme covered in the book) there is a price for every interested buyer, but it is not always the same for everyone. Just as only one person is willing to pay the highest "winning" bid, there are those who will pay more for any product or service than the average customer. This book helps you to identify those people.
Rich
Good Solid Advice
The suggestions about add-ons, segmenting your buyers and really trying to assess the value of your product when you price it were helpful. The problem of "goodwill" opened my eyes as I think this isn't an uncommon way that profits are bled from businesses. After reading this book, I'm really thinking more and more about getting to know my customers in terms of (1) what they want and (2) precisely how much they value my product. This is a great first step to obtaining optimal pricing. This book gets you thinking and can stir your creativity about how to better price your good/service.
Great book
I am a small business owner and get involved in pricing daily. This book provided extremely useful insight into how to make the most money from each deal. An easy read about a topic that is all too often neglected by the small business owner.
Advice that Can Instantly Increase Profits
Rafi's treatment of the subject of pricing was just what I needed to open my eyes to a whole new set of strategies for increasing profits. As a former Corporate Engineer and Manager turned entrepreneur, I needed a more thorough understanding of pricing and found exactly what I was looking for in The Art of Pricing. I appreciated the easy to read and entertaining writing style along with the many examples presented in the book. Books that make it easy for me to remember new concepts also make it easier for me to quickly apply those concepts in real world situations. I will be honing my new pricing skills for years to come. The Art of Pricing has become one of my favorite books to recommend to others.
 Good Ideas for Novices!
Key to Mohammed's thinking is to set different prices for different customers having different valuations of what they are willing to pay - eg. matinee and evening prices for movies, early-bird prices at restaurants, discounts for those willing to order airline seats ahead of time.
To minimize sales staff giving away profits it is useful to show them the differential profits/product (and hopefully link their compensation to the firm's profits). Beware of sales-boosting gimmicks (eg. frequent-flyer miles) that can be "gamed" by focusing on high-volumes of low-cost purchases. One can test different strategies via eg. varying coupon offers placed within catalogs.
Other important concepts include add-ons (warranties, financing), differential pricing according to location, and taking a long-term perspective (eg. fairness during disasters and temporary product shortages).
"Cost-plus" pricing is not one of Mohammed's recommendations - however, it is increasingly utilized by successful low-cost retailers such as Costco and Wal-Mart. Setting prices using data about alternatives/substitutes is a suggested approach - however, Mohammed does not go into eg. focus-group assessments of how much specific options or new products might be worth.
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