Pricing Best Practices RISE 2011 Session

© Business Success Center, Austin, TX 2011

With Jan Triplett, Ph.D. CEO, Business Success Center

© 2011 Austin, TX

Best Practices in Pricing

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Your Passion, BSC’s Expertise

• Our Mission: to help you find your way• Providing guided growth strategy & advice to achieve success since 1982• Sales, marketing, & financial management focus • Clients from A-Z industries, high tech to no tech, products & services• Top 20 Management Consulting Firm (ABJ Book of Lists); national & international recognition

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Your Company Focus?

B to B?B to C?

Better to be P to P

.)(. (Belly Button to Belly Button)

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Your Price is NEVER Right for Everyone

It’s all about:1. Getting the right customer2. Keeping the right customer3. Considering their perceived risk4. Knowing your true total costs5. Identifying the top value you bring6. Accounting for long & short term goals7. Know the laws

THEN you can price right & legally!

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Your Biggest Concern about PricingWhat keeps you up at night?

1. Losing too many customers.2. Not being competitively priced.3. Leaving money on the table.4. Not being profitable enough on each sale.5. Afraid I am not accounting for all my costs (missing

something).6. Breaking the law with my pricing policies.7. None of the above.

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Attract paying customers who are:• Most Lucrative• Easiest Sale

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What’s Your Pricing Goal?Match the goal.


What Customer Do You Want?Set Your Prices Based on Them.

Platinum Gold Silver

Bronze Lead Concrete/Radio Active Waste

Platinum & Gold — create stabilitySilver — has potentialBronze — uncertainLead — a time wasterConcrete — a business killer & never satisfiedRadio Active Waste a long-lasting reputation & confidence destroyer

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Platinum customers are…

• VisionariesSee problem as you doSee value of your solution

• AdventurousConfident in youTrust you

• DecisiveHassle-free or less hassle

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A “Fair” Price

Dilemma: What’s fair to one; may not be fair to the other.

Customers want: To get good value, pay a fair price.

Sellers want: To give good value, get a fair price.

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What You Need to Know about Pricing

Pricing should be… Pricing will…

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An attention getter and qualifier.

A way to position your company.

Perceived by your Platinum-preferred client as a benefit not just a feature.

Make you rich or at least comfortable or just sick and tired.

Affect the success of all areas of the business.

Require that you don’t just set it & forget it.


The Big Pricing Policy Debate

CostVs.Value

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What Do Your Customers Want?

• More than a solution or something fixed.There are 6 Situational Outcomes™ they

value. (More at ownersview.com: http://bit.ly/gtdaVP)

There are 5 personal risks they are willing to take to get what they value at the price charged:

Social, Psychological, Functional, Physical, Financial• Set your prices based on your ability to deliver that outcome and reduce their risk.

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What Do You Want Customers To Do?Pricing Strategy Should Match Action.

Examples:• Try it• Stock up• Repeat buy• What else?

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Pricing Considerations

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Pricing is an emotional issue for you, your employees, & customers.

Buyer reaction to price is unpredictable.

Shoot from the hip & you’ll end up shot in the foot or worse.

One price strategy usually doesn’t fit all products/services.

Controlling costs can make a business more profitable than raising the price.

Stay alert: pricing laws & regulations change.


A Quick Word About Laws

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Two key laws to be familiar with:

1. DTPA (Deceptive Trade Practices Act) — illegal to “bait & switch” or any of the many other ways that are used to mislead customers. Applicable to sales to businesses and consumers.http://www.statutes.legis.state.tx.us/SOTWDocs/BC/htm/BC.17.htm

2. Clayton Act (Robinson-Patman Act Amendment) — illegal to discriminate on price (except in some instances), tie or bundle purchasing contracts.

http://www.statutes.legis.state.tx.us/SOTWDocs/BC/htm/BC.17.htm

http://www.statutes.legis.state.tx.us/SOTWDocs/BC/htm/BC.17.htm


Best Practices in Pricing

• Price what you’re worth.• Use KISS pricing system.• Account for profit, contingency & hassle-factor.• Price for positioning.• Monitor & adjust.

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Worst Practices in Pricing

• Undervaluing your benefits.• Under-estimating costs.• Not considering your Platinum customer’s “Flinch Point”.• Blindly following competition.• Inconsistent pricing.• Violating laws - DTPA

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Good & Bad Pricing Examples

1.Charging $15 per hr for professional services2. Providing a $400 discount on a product3. Charging $500 for one research report4. Charging low price to get started5.Your examples?

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Pricing Practices Action Items1. Make sure you have accounted for your true total

costs.2. Know the value of what you sell.3. Ensure your pricing reflects your preferred customers

value outcome, your preferred positioning, meets legal requirements, includes profit and contingency as well as costs.

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For a copy of BSC’s Pricing Terms & Concepts Glossary or additional questions, please email me at [email protected].

Here’s to your

success!Jan Triplett

[email protected]

Jan Triplett

Blog: http://www.ownersview.com

Business Success Center

Sales & Financial Management Services


March 8, 2011

mailto:[email protected]

Pricing Best Practices RISE 2011 Session

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