Pricing is where strategy meets execution. Preparing to defend decisions on pricing structure, segmentation and levels forces you to know your customers and your own company.
People respond to incentives. You can use price to steer their behavior. This can result in:
– higher/lower cost to serve,
– more/fewer referrals,
– shorter/longer tenure or retention,
– consistent vs spotty purchasing
– increasing/decreasing demand
– shifts to alternatives
Other GTM strategic changes can cause the same changes in customer behavior as pricing changes so it’s especially important to be able to tease out the impacts of price alone vs the rest of your tool kit and determine what the most cost effective levers are.
Did your brilliantly creative ad campaign cost more than it raised sales?
Did implementing al a carte pricing decrease demand for ancillary services? (checked baggage fees can delay flights as everyone competes for overhead space)
New product introductions can cannibalize demand for older versions
Pricing too high in premium segments can cause grey market issues and undermine channel partnerships.
Having a sudden boost in the number of accounts can degrade customer service, increase wait times and degrade the value of the product itself.
Last week Casey offered to give creative advice for any business INCLUDING the KPIs to monitor results of implementing it. He also had a separate post on Pre-mortems with success/kill criteria. Another post was on providing a lucrative path for key individual contributors other than people management.
He’s definitely caught my attention by knowing how to apply common sense both systematically and creatively.
Carragee Consulting 
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