Strata Community Australia National Convention Presentation 2nd Jun 2014

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Are You Pricing Like Dennis Denuto?
My presentation to the Strata Community Australia National Convention, in Cairns, on Monday 2nd June 2014

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Strata Community Australia National Convention Presentation 2nd Jun 2014

  1. 1. Slide 1
  2. 2. Slide 2 Are You Pricing Like Dennis Denuto? Why Pricing Is Getting Scary? Why Is Pricing So Important? Are You pricing Like Dennis Denuto? 10 Ways To Improve your Pricing
  3. 3. Slide 3 Insert text Why Pricing is Getting Scary
  4. 4. Slide 4 Number 10 Power to the Customer The Marketer The Customer Customers know more about marketers, than marketers know about customers
  5. 5. Slide 5 Number 9 Comparisons are easy
  6. 6. Slide 6 Number 8 Scan & Scram
  7. 7. Slide 7 Number 7 Err at your peril
  8. 8. Slide 8 Number 6 Automatic Refunds
  9. 9. Slide 9 Number 5 Choices
  10. 10. Slide 10 Number 4 Everyone’s going to know about this…
  11. 11. Slide 11 Number 4 Even your Shareholders…
  12. 12. Slide 12 Number 3 I’m not buying your time
  13. 13. Slide 13 Number 2 Just give me your quote!
  14. 14. Slide 14 Number 1 Beaten to a Pulp
  15. 15. Slide 15 Insert text Warning: Audience Participation Imminent Why is Pricing So Important?
  16. 16. Slide 16 You offer a service with a 30% margin, and you are planning on reducing prices by 5%. What sort of volume uplift is required  to  maintain  exis+ng   revenue?   You have a service with a 20% margin, and you are planning on increasing prices by 8%. What sort of volume are you pu2ng  at  risk? Ø  20% Volume UpliftØ  10% Volume UpliftØ  5% Volume Uplift Ø  8.2% of volumes Ø  28.6% of volumes Ø  38.7% of volumes Quiz Time Decreasing & Increasing Prices
  17. 17. Slide 17 Why is Pricing so Important? Impact on Operating Profit of a 1% improvement in… 2.3% 3.3% 7.8% 11.1% Fixed Costs Volume Variable Costs Price
  18. 18. Slide 18 …Regardless of the Industry Impact on Operating Profit of a 1% improvement in Price 22.0% 13.5% 12.7% 12.3% 11.4% 11.1% 10.4% 10.1% 9.8% 9.3% 8.6% 6.8% 6.1% 3.0% 1.8% Automotive Transportation Metals & Mining Chemicals High Tech & Electronics Aurospace & Defense Paper Insurance Healthcare Oil & Gas Communications Consumer Products Pharmaceuticals Banking Investment Impact of a 1% Price Improvement on Operating Profit For The Kroger Retail Food Chain… ►  If prices were increased 1%...? For Coca Cola… ►  If prices were reduced 1%...? For Continental Airlines ►  44mill passengers x Average fare of $193 = Loss
  19. 19. Slide 19 50.0% 40.0% 32.0% 28.0% 26.0% 18.0% 8.0% 2.0% Packard Other Compaq HP IBM Gateway Dell Apple Source: Docters, R et al (2004) Winning the Profit Game: Smarter Branding, Smarter Pricing, McGraw-Hill, p40 The Importance of Price As the Primary Selection Criteria, by brand – PC Industry Who’s a Fan… Of this Brand?
  20. 20. Slide 20 Words of Pricing Wisdom “…if you have to have a prayer session before raising…prices…then you’ve got a terrible business” “Price is what you pay… value is what you get” “The single most important decision in evaluating a business is pricing power”
  21. 21. Slide 21 But What is “Pricing Power”? “The ability of you to get the price you deserve for the value you provide”
  22. 22. Slide 22 Insert text Are You Pricing Like Dennis Denuto?
  23. 23. Slide 23 Number 10 Leaving Pricing too late in the Marketing Process
  24. 24. Slide 24 Number 9 Top-down Pricing to fix the P&L
  25. 25. Slide 25 Number 8 Using the Same Averages across all Products & Services
  26. 26. Slide 26 Number 7 Cost-Plus Pricing
  27. 27. Slide 27 Number 6 Too Narrow a Competitive Perspective
  28. 28. Slide 28 Number 5 To the General Level of the Competition
  29. 29. Slide 29 Number 4 Not Segmenting Customers
  30. 30. Slide 30 Number 3 Mechanical
  31. 31. Slide 31 Number 2 Not Challenging Competitors or the Industry
  32. 32. Slide 32 Number 1 Not Changing Your Pricing Model
  33. 33. Slide 33 Number 1 Someone Who Did Change her Pricing Model…
  34. 34. Slide 34 Insert text 10 Ways Your Can Improve Your Pricing
  35. 35. Slide 35 Number 10 Develop a Pricing Strategy…
  36. 36. Slide 36 Number 10 ...that Includes a Discounting Policy
  37. 37. Slide 37 Number 9 Don’t Condition the Market
  38. 38. Slide 38 Number 8 Form a Pricing Committee
  39. 39. Slide 39 Number 7 Don’t Talk About Costs… …and remove invoice shock
  40. 40. Slide 40 Number 6 Its Not About You
  41. 41. Slide 41 Number 5 All Value Is Subjective
  42. 42. Slide 42 Number 4 All Value Is Contextual
  43. 43. Slide 43 Number 4 All Value Is Contextual
  44. 44. Slide 44 Number 3 Segment the Market
  45. 45. Slide 45 Price   Buyers   Rela8on-­‐ ship   Buyers   Value   Buyers   Poker   Players   Number 2 Understand Your Buyer
  46. 46. Slide 46 Number 1 Remember Goldilocks…?
  47. 47. Slide 47 Any Questions?
  48. 48. Slide 48 Jon Manning Founder & Director, Sans-Prix.com Founder & Managing Director, PricingProphets.com PO Box 533, Ascot Vale, Vic 3032 Australia youtube.com/user/PricingProphets linkedin.com/company/Pricing-Prophets jon@sans-prix.com +61 (0) 405 629-141 @SansPrix | @PricingProphets facebook.com/PricingProphets http://www.SansPrix.BlogSpot.com SlideShare.net/SansPrix Contact Information

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