As expected, Amazon this week launched a new media tablet, the Kindle Fire, at a $199 price point. This immediately started the debate about whether the Kindle Fire was an iPad killer. Indeed, this debate overshadowed the overhaul of the … Read More
customer segmentation
Do Pricing First, Not Last
Creative people love making things– widgets, software, knowledge, service calls. A lot of businesses and product lines get started this way. Someone has a cool idea to make something. Skeptics shoot down the idea. The founder or engineer makes it. … Read More
Let Your Customers Do Your Price Optimization For You
Many small business owners consider pricing some kind of dark voodoo that you can only get right with the appropriate incantations, or access to a pricing consultant who knows the right incantations. At risk of hurting my own business, I’m … Read More
Price Increase through Reverse Volume Discount
It’s no secret that companies often change package sizes to mask or soften price increases. Coca Cola is going one step further, touting it’s 16oz bottles as “more for your buck” at $0.99. Want more soda? You can pony up … Read More
How did Netflix raise their prices 60%
Twitter is abuzz with the anguished cries of Netflix customers, many of whom will soon be paying $16 per month instead of $10 per month for movie rentals. Many others have angrily threatened to cancel their subscriptions. Instead of focusing … Read More
To Groupon or Not to Groupon?
Groupon has taken the local deal market by storm, growing quickly to $2B in revenue (depending on how you define “revenue”). The local deals company has also created massive buzz and is now preparing for one of the largest IPOs … Read More
Real vs. Perceived Value
If your maximum price is determined by the perceived differential value of your offering, how do you know what value customers perceive. Many of them won’t tell you, especially if they think you’ll use that information to jack up the … Read More
Price Optimization 101
I get a lot of questions about price optimization, so I just wanted to make it really simple. Write down your costs. Of course, you won’t know your real costs, so just use estimates, preferably from 2-5 years ago. These … Read More
10 Maxims for Improving Profit through Better Pricing
Your price ceiling is limited by the Perceived Differential Value of your offering. Customers determine this, but you can help them along the way. Your price floor is limited by your costs. If your floor and ceiling are the same … Read More
In Apple Comparison, Dell Leans on Price
Dell has launched a new back-to-school campaign highlighting the lower prices of of Dell laptops compared to Apple. At a high level, this is a great idea. Apple has regained a (the?) leadership position in the educational market, which is … Read More