Smart pricing

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Randy Aimone discusses why 90% of american businesses don't maximize their income strategies due to poor pricing strategies.
We discuss more profitable pricing,

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Smart pricing

  1. 1. SmartPricing
  2. 2. Farmer’s HarvestTill Plant Weed Harvest
  3. 3. Harvest Time!
  4. 4. Farmer’s Harvest Till Plant Weed Harvest Business CycleDevelop Create Market Sell
  5. 5. The 4 Levers- 1% better
  6. 6. The 4 Levers- 1% better 2.45% Increased Profits
  7. 7. The 4 Levers- 1% better3.28%Increased Profits
  8. 8. The 4 Levers- 1% better 6.52% Increased Profits
  9. 9. The 4 Levers- 1% better10.29%Increased Profits
  10. 10. A 1% difference.. increased profit121086420 Fixed Cost Sales Quantity Variable Costs Price
  11. 11. The 3 Simple Pricing Models• Cost Plus• Competition Based or “Strategic” Pricing• Consumer based pricing
  12. 12. Cost PlusMy Costs + 25%
  13. 13. ‘Strategic’ PricingWhat is my competition charging for a similar item?
  14. 14. Consumer Pricing“What can I gouge this sucker Customer for?”
  15. 15. Which Model are you using?
  16. 16. Why thetraditional models fail
  17. 17. Cost Plus• No incentive for Efficiency gains• Price Floor• Leaving money on the table
  18. 18. Strategic• Who’s saying that the competition is pricing right?• Moves your product to commodity• Southwest vs Delta.
  19. 19. Consumer Based• Negotiation skills reign• Bad Blood• Biased based
  20. 20. Pay as you wish
  21. 21. 4 Price Points for “Fries with that?”
  22. 22. Razors & Video Games
  23. 23. Price Wars
  24. 24. What Did Walmart do to win the retail game?
  25. 25. Think Small98% of their skus sellless than 20 copies per year
  26. 26. Think Small 1 Billion downloads @ $0.33 each = $330,000,000
  27. 27. Think Small 1 Billion downloads @ $0.33 each = $330,000,000
  28. 28. Subscription ModelFresh Videos, on demand
  29. 29. Subscription ModelFresh Fruits, every month
  30. 30. Snob PremiumWhich sold (nearly 4x) better: A Chinese silk scarf for $200-300 or A French silk scarf for $2000-3000 Same silk, similar designs, same manufacturer
  31. 31. Snob PremiumWHY?!?
  32. 32. Pay if it worksPay only if it works model.No results, no pay.
  33. 33. So what’s the right way to price?

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