Pricing Strategy
The right pricing strategy can change the entire trajectory of a business, a market, or society. Finding it requires answers to three questions.
- How do you create and share value? This is measurable value for your customers. Your answer reflects your value drivers, your limitations, and your objectives for growth and differentiation.
- What pricing game do you want to play? There are seven games, each suited to certain market characteristics and subject to different market forces. You need to decide which game best fits your market and your competitive advantages.
- What pricing model fits your value creation strategy? A pricing model is a set of choices that aligns incentives across your market and within your organization. It covers how you set and adjust prices, depending on your chosen pricing game.
Your answers will help you focus on collaborative growth with customers, not zero-sum value extraction from them.
MORE Pricing Strategy INSIGHTS
Game Changer
What is the true value of legal services?That is not an academic or rhetorical question, but rather one whose answer could fundamentally change the way law firms price their services….
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Taylor Swift selects the new president of the united states Pricing games
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The market for generative AI (GenAI) seems to evolve on a daily basis, but the providers of these applications nonetheless face some fundamental challenges. One of these is the choice…
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In Part III of Game Changer my co-author Arnab Sinha, and our colleagues, looked at how companies in retail and consumer goods sectors are deploying advanced analytics to completely rethink…
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The market for software has evolved from the days when we purchased products from Adobe or Microsoft on discs in cardboard boxes. When we use today’s cloud-based services, we tend…
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In Part III of Game Changer we worked with our colleagues at BCG to show how several companies successfully switched pricing games in response to shifts in customer behavior or…
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We contend that the right pricing strategy can change the entire trajectory of a business, a market, and even society. Judging from trends in the job market, it seems that…
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In most of our newsletters, my colleague Arnab Sinha and I have focused on the nature of the seven games in the Strategic Pricing Hexagon. Today we focus on the…
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The pricing of generative artificial intelligence (GenAI) applications is a hot topic. Microsoft revealed its vision for its Copilot “digital companion” last month and affirmed price points of $30 per…
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How much is your work worth? That is the pricing challenge almost everyone confronts personally. The wages people receive are the prices set for their work. That applies to the…
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Imagine going to the store to buy your favorite breakfast cereal – a classic Uniform Game product – but instead of paying the price displayed at the shelf, you negotiate…
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One of the most enduring clichés in marketing is that “the market sets the price.” Business leaders may feel they lack pricing power in the conventional sense, because they don’t…
—> Read moreRECOMMENDED READING
Users or Usage: What drives GenAI’s value?
The market for generative AI (GenAI) seems to evolve on a daily basis, but the providers of these applications nonetheless face some fundamental challenges. One of these is the choice…
—> Read More