Most people think pricing is just an analytical task.
We talk about numbers, gross margins, unit costs, volumes, analysis, competitors, price elasticity and so on.
These are all important considerations, but they don’t always show you the way forward. Because you can’t predict the future based on past performance.
Better pricing is not incremental, it comes from re-imagining your pricing in ways that you couldn’t previously see.
In other words, designing new pricing strategies in line with what customer’s value, instead of in line with your costs.
And you don’t always need data to do this.
You need creativity, imagination, thought and a willingness to try or consider new ways of pricing your business that will be far better that what you do today.
Most businesses have a very basic / crude approach to pricing. I would rate the business world a 2 out of 10 when it comes to pricing capability.
If you want to get better at pricing, read up on it, study different approaches and try out different strategies.
Be creative with your pricing, and you will learn and achieve far more than if you just try to use an analytical approach.
What do you think is most important when it comes to developing better pricing?