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Featured Item:
WEALTH VIRTUES
A Guide to acquire more money than you spend and to save more
money than you owe
Rating:  -
Reed Holden and Mark Burton's Pricing with Confidence makes the complex topic of pricing strategy understandable and usable to businesses of all industries and sizes. Many of the examples are easily transferrable from one industry to the next. Their approach is logical and rational and can be adapted to a sole proprietor with an entrepreneurial idea to the largest of companies. The only thing, I severely disliked about the book was the poker analogy which runs throughout the book. Business, unlike poker, is not a zero-sum game. I understand the analogy they are trying to make, but, in my opinion, it detracts from the overall value of the ideas presented, hence the four stars.
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This book provides an excellent, no nonsense approach to understanding the value you provide customers and how to use that knowledge to both set appropriate prices and communicate / negotiate with buyers. Their 10 rules make a lot of sense and are supported by clear explanations and industry examples. Note that the book is primarily targeted toward industrial rather than consumer products. It's a good read for sales or corporate managers. If you want a more analytic book that provides the conceptual basis in more detail and with more math - try The "Strategy and Tactics of Pricing" by Thomas T. Nagle and John E. Hogan. This is a great read for senior marketing managers that will need to fully understand and utilize value pricing.
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Is your company working hard to deliver value to customers?
Are you facing increasingly tough competition, possibly from new competitors?
And are you struggling to address cost pressures from your suppliers?
If you answered YES to one or more of these questions then you probably need some help with your pricing. Many studies show that of all marketing variables, pricing has the most impact on the bottom line. But where should you look for advice so you can make your pricing decisions with confidence? The answer: Pricing with Confidence by Reed Holden and Mark Burton. Holden and Burton have written a highly readable, practically oriented book for making pricing decisions; their 10 Rules of Pricing can vastly improve your decision-making. Think about this question: Why is pricing so hard and why do most companies mess it up? Holden and Burton pose this question in their Introduction. Could your firm be one of those they are talking about? If you believe that pricing is hard in your firm and that you don't always get it right, then pick up Pricing with Confidence; you'll be glad you did.
Noel Capon
R.C. Kopf Professor of International Marketing and Director of the Executive Program in Strategic Pricing, Columbia Business School, New York, New York.
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I liked this book a lot. I thought it was well outlined and well written. The book's overall message is that the small business owner should link prices to the value delivered. The reader should be able to optimize pricing for her services or products after considering the 10 rules of pricing presented in this book:
1. Generally, don't let the customer talk you down in price
2. Price your service or product at a level that a customer is willing to pay if they understand the value of your service or product
3. Know which of three pricing strategies you are using and stick to it
4. It's OK to negotiate price with customers, but make sure you win
5. It's OK to lower prices, but only in order to increase profits
6. Expand your offerings so you aren't locked into one price for one product
7. Great pricing will often force your competition to react to your pricing
8. Your company's sales force has to be expert at why and how you priced your services or products
9. Set prices based on value - not on cost-plus
10. Always keep in mind you are in business to make a profit without leaving money on the table
I loved the instruction that the author provides regarding how an owner of a small business has to be willing (and able) to fire unprofitable clients and customers. Business people who compete on price are playing a fool's game. Smart business owners understand that value is the basis for business exchange and that to be successful at business one must FULLY understand value. This book puts forth a pretty good effort to help the reader fully understand value, or at least how to go about fully understanding value after doing a little investigation and research of the market.
Pricing goods and/or services is far from simple. And setting an optimal price is one of the most difficult decisions to make when starting a business. Furthermore, as a business grows and matures pricing at an optimal level continues to be difficult. Prices never stay the same because demand never stays the same. To do this well one must know the market (competitors & customers), know the costs, know the perceived value, and know the actual value.
Getting a handle on all this is not particularly easy. This is especially true because customers are often times very hard to figure out. Some are price buyers, some are value buyers, some are relationship buyers, and some are poker-playing buyers. Knowing these four types of buyers is a heads up for the small business person. But he or she still has to read the customer and figure out which one of these four the customer is before negotiations can be performed in favor of the seller. Read this book and start on your path of being a better pricer of your services or goods. 5 stars!
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As a forum leader for a group of CEOs of small, growing businesses, we used this book to help us in understanding whether the pricing strategies each of our businesses used were optimizing their market and sales successes. Since many of these small companies compete with some of the largest players in their respective industries, it was revealing to each of them to see their realities detailed so clearly by the authors. It has led each of them to engage in more thinking and analysis relative to a pricing strategy that matches their value offering. This is a must read for any small business up against the big guys.
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