John Brandt brings up a number of great points on pricing, including how to maximize your profits. Skipping interesting story about Louie DePalma, the dispatcher on the television series Taxi, here are the points you should take away:
Two reasons executives needlessly cheat their firm out of margin dollars:
Ignorance: Price is determined solely by what a customers is willing to pay, regardless of the cost.
Fear: Timid pricing diminishes your brand investment making special pricing difficult to believe.
Three rules to overcome pricing ignorance and fear:
Add non-product value: Create customer value that extends beyond the product itself, include bundled services, information, or products.
Ask for enough the first time: You'll never be paid more than you ask for, so ask for enough to cover your costs and create a profit.
Consider asking for too much: Give them a price high enough to get their attention, but not too high that you lose them. (Let the customer think any compromise on price is a gain.)
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