Are You Pricing Like Dennis Denuto? My 22nd May 2015 presentation to CPA Australia's Public Practice Conference, at Lorne, Victoria

1. ARE YOU PRICING LIKE
DENNIS DENUTO?
JON MANNING

2. ARE YOU PRICING LIKE DENNIS DENUTO?
Why Pricing Is Getting Scary?
Why Is Pricing So Important?
Are You Pricing Like Dennis Denuto?
10 Steps to Value-Based Pricing

3. WHY IS PRICING GETTING SCARY?

4. Number 10
Power to the customer
The Marketer The Customer
Customers know more about marketers,
than marketers know about customers

5. Number 9
Comparisons are easy

6. Number 8
Scan & scram

7. Number 7
Err at your peril

8. Number 6
Automatic refunds

9. Number 5
Choices

10. Number 4
Everyone’s going to know about this…

11. Number 4
…even your shareholders…

12. Number 3
I’m not buying your time

13. Number 2
Just give me your quote!

14. Number 1
Beaten to a pulp

15. WHY IS PRICING SO IMPORTANT?

16. 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

17. …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
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

18. 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?

19. 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”

20. But what is “Pricing Power”?
“The ability of
you to get the
price you
deserve for
the value you
provide”

21. ARE YOU
PRICING LIKE DENNIS DENUTO?

22. Number 10
Leaving Pricing too late in the
marketing process

23. Number 9
Top-down Pricing to fix the P&L

24. Number 8
Confusing Budgeting with Pricing

25. Number 7
Cost-Plus Pricing

26. Number 6
Too narrow a competitive perspective

27. Number 5
Using the same average across all
products and services

28. Number 4
Not segmenting customers

29. Number 3
Mechanical

30. Number 2
Not challenging competitors or
industry norms

31. Number 1
Not changing your pricing model

32. Number 1
Someone who did change their
Pricing model…

33. Number 1
Someone who did change her
Pricing model…

34. TEN STEPS TO VALUE-BASED
PRICING

35. Number 10
Form a Pricing Committee

36. Number 9
Develop a Pricing Strategy…

37. Number 9
...that Includes a discounting policy…

38. Number 9
…but don’t condition the market

39. Number 8
Don’t boil the ocean

40. Number 7
Start with the outputs

41. Number 7
Start with the outputs
http://www.springwise.com/comedy-club-charges-customers-laugh/

42. Number 6
Terms and Conditions

43. Number 5
After-Action Reviews
What was
supposed to
happen?
What actually
did happen?
Why was there
a difference?
What can we
learn from this?
AAR
Facts
Opinions

44. Number 4
Offer Choices…

45. Number 3
…including top-end decoys…

46. Number 3
…or bottom-end decoys…

47. Number 3
Decoys anywhere…
16%
0%
84%

48. Number 3
Decoys anywhere…
16% to 68%
84% to 32%

49. Number 3
Decoys are profitable
1,486,838
16% @ $59 +
84% @ $125
$170,153,741
1,486,838
68% @ $59 +
32% @ $125
$119,125,461
The Difference: -$51,028,280 or -29.9%

50. Number 2
Segment the Market

51. Number 1
Use time the right way in pricing

52. Any
Questions?

53. Jon Manning
Sans-Prix.com
PricingProphets.com
PO Box 533, Ascot Vale, Vic 3032
youtube.com/user/PricingProphets
linkedin.com/company/Pricing-Prophets
jon@sans-prix.com +61 (0) 405 629-141
@SansPrix | @PricingProphets
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