Earlier this month there was an article in the Wall Street Journal, Why Gadget Warranties Are (Almost) Never Worth It, pointing out the disadvantageous math behind most extended warranties and chastising sellers for offering them. From my perspective extended warranties are good examples of when multi-part pricing makes sense, and they can be a win […]
This is the third in a six part blog series on how manufacturers and distributors can apply Six Sigma methodology to the pricing function to generate repeatable margin gains. This blog covers what to consider in building measurements and a metrics plan for pricing team member assessment and incentives. All pricing practice leaders know a disciplined […]
Pricing strategies that trick customers cause disssatisfaction | Strategic Pricing Solutions
Last month I wrote a post Dealing with Customer Complaints in which I mentioned some personal dealings with Verizon that were unsatisfactory. In the post I wrote that it felt like playing Hunt the Wumpus. I also refer to it as a Where’s Waldo pricing strategy. I know Waldo is in there, in the form […]
Inside SPA: The Epicor-SPA Program | Strategic Pricing Associates
For every product, for every customer, there is a price that produces the optimal gross margin – the highest margin you can obtain while retaining the customer’s business. What that price is depends on multiple factors, from the amount of business you do with a customer annually to the particular item being ordered. Up until […]
Fire Low Margin Customers as a Pricing Strategy? Not a Good One. | Strategic Pricing Solutions
A somewhat popular tactic of companies looking to improve their margins is to identify their low-margin customers and fire them. They don’t go Donald Trump on their customers and say “You’re fired.” Instead the companies jack up the prices of those customers to either drive them away or make them profitable. Some companies even erroneously […]
Pricing Complaints - How to Respond | Strategic Pricing Solutions
If customers complain about your pricing, should you do something? A few things have occurred recently that have prompted me to write this post. In early March a bill was introduced in the Senate, Forbidding Airlines from Imposing Ridiculous Fees (FAIR) Act. A few days later I overheard two guys in the gym complaining about […]
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