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Are You Pricing Like Dennis Denuto?

Why Pricing Is Getting Scary? Why Is Pricing So Important?

Are You pricing Like Dennis Denuto? 10 Ways To Improve your Pricing

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Why Pricing is Getting Scary

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Number 10

Power to the Customer

The Marketer The Customer

Customers know more about marketers, than marketers know about customers

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Number 9

Comparisons are easy

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Number 8

Scan & Scram

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Number 7

Err at your peril

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Number 6

Automatic Refunds

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Number 5

Choices

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Number 4

Everyone’s going to know about this…

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Number 4

Even your Shareholders…

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Number 3

I’m not buying your time

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Number 2

Just give me your quote!

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Number 1

Beaten to a Pulp

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Warning: Audience Participation Imminent

Why is Pricing So Important?

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You offer a service with a 30% margin, and you are planning on reducing prices by 5%. What sort of volume uplift is required  to  maintain  exis+ng  revenue?  

You have a service with a 20% margin, and you are planning on increasing prices by 8%. What sort of volume are you pu2ng  at  risk?

Ø  20% Volume Uplift

Ø  10% Volume Uplift

Ø  5% Volume Uplift

Ø  8.2% of volumes

Ø  28.6% of volumes

Ø  38.7% of volumes

Quiz Time Decreasing & Increasing Prices

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Why is Pricing so Important? Impact on Operating Profit of a 1% improvement in…

2.3% 3.3%

7.8%

11.1%

Fixed Costs Volume Variable Costs Price

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…Regardless of the Industry Impact on Operating Profit of a 1% improvement in Price

22.0%

13.5%

12.7%

12.3%

11.4%

11.1%

10.4%

10.1%

9.8%

9.3%

8.6%

6.8%

6.1%

3.0%

1.8%

Automotive

Transportation

Metals & Mining

Chemicals

High Tech & Electronics

Aurospace & Defense

Paper

Insurance

Healthcare

Oil & Gas

Communications

Consumer Products

Pharmaceuticals

Banking

Investment

Impact of a 1% Price Improvement on Operating Profit

For The Kroger Retail Food Chain… ►  If prices were increased 1%...?

For Coca Cola… ►  If prices were reduced 1%...?

For Continental Airlines ►  44mill passengers x Average fare

of $193 = Loss

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50.0%

40.0%

32.0% 28.0%

26.0%

18.0%

8.0%

2.0%

Packard Other Compaq HP IBM Gateway Dell Apple

Source: Docters, R et al (2004) Winning the Profit Game: Smarter Branding, Smarter Pricing, McGraw-Hill, p40

The Importance of Price As the Primary Selection Criteria, by brand – PC Industry

Who’s a Fan… Of this Brand?

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Words of Pricing Wisdom

“…if you have to have a prayer session before raising…prices…then you’ve got a terrible

business”

“Price is what you pay…value is what you get”

“The single most important decision in evaluating a

business is pricing power”

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But What is “Pricing Power”?

“The ability of you to get the

price you deserve for

the value you provide”

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Are You Pricing Like Dennis Denuto?

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Number 10

Leaving Pricing too late in the Marketing Process

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Number 9

Top-down Pricing to fix the P&L

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Number 8

Using the Same Averages across all Products & Services

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Number 7

Cost-Plus Pricing

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Number 6

Too Narrow a Competitive Perspective

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Number 5

To the General Level of the Competition

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Number 4

Not Segmenting Customers

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Number 3

Mechanical

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Number 2

Not Challenging Competitors or the Industry

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Not Changing Your Pricing Model

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Number 1

Someone Who Did Change her Pricing Model…

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10 Ways Your Can Improve Your Pricing

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Number 10

Develop a Pricing Strategy…

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Number 10

...that Includes a Discounting Policy

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Number 9

Don’t Condition the Market

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Number 8

Form a Pricing Committee

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Number 7

Don’t Talk About Costs…

…and remove invoice shock

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Number 6

Its Not About You

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Number 5

All Value Is Subjective

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Number 4

All Value Is Contextual

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Number 4

All Value Is Contextual

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Number 3

Segment the Market

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Price  Buyers  

Rela8on-­‐ship  Buyers  

Value  Buyers  

Poker  Players  

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Understand Your Buyer

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Number 1

Remember Goldilocks…?

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Any

Questions?

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Jon Manning Founder & Director, Sans-Prix.com

Founder & Managing Director, PricingProphets.com

PO Box 533, Ascot Vale, Vic 3032 Australia

youtube.com/user/PricingProphets

linkedin.com/company/Pricing-Prophets

jon@sans-prix.com

+61 (0) 405 629-141

@SansPrix | @PricingProphets facebook.com/PricingProphets

http://www.SansPrix.BlogSpot.com

SlideShare.net/SansPrix

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