Over the years, I’ve written often about pricing … an enigma wrapped in a conundrum for most businesses.
It comes up in many contexts, from evaluating revenue performance, using pricing as a powerful offensive weapon and evaluating the slippery slope of price discounting.
If you’re the buyer, this quote by John Ruskin neatly summarizes the pricing challenge:
[quote style=”boxed”]It is unwise to pay too much, but it is worse to pay too little. When you pay too much you lose a little money – that is all.
When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do.
The common law of business balance prohibits paying a little and getting a lot – it can’t be done.
If you deal with the lowest bidder, it is wise to add something for the risk you run, and if you do that, you will have enough money to pay for something better.[/quote]
Question: What’s the biggest pricing challenge you face in your business?