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Hidden Pricing Power

August 8, 2012

Donald V. Potter discusses many tips on pricing, in his classic article “Discovering Hidden Pricing Power”, published in “Business Horizons” magazine, during November, December 2000. His inputs to go beyond the standard rate cards, % discounting, fixed price and T&M models, so that you have the edge when trying to make that sale.

Here are some useful tips from this wonderful article:

  • Bundle Benefits
  • Unbundle Benefits
  • Offer alternative service levels and price points
  • Link Future Purchases to Current Transaction
  • Understand the components of the cost better to keep cost and price moving together
  • Shift some of the price to suppliers
  • Set Prices Selectively, Not across the board
  • Move Prices in Smaller Increments
  • Raise Invisible Prices
  • Match Price Moves to the Market
  • Use Discounts strategically to build relationship with important clients
  • Price Against The Leader (Price it down when leader is reluctant)
  • Follow the leader (Move the prices up, if leader increases)
  • Seek out new segments that tolerate high prices

Venkatesan Sundaram,

Senior Director, CRMIT

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