Growth Worries? Price Optimization is the Answer
The beginning of 2016 has proven to be a challenging time for many businesses. Growth forecasts are being taken down across the board and the turmoil in the oil and stock markets point to a challenging business environment in 2016. But there is something you can do: review and optimize your pricing to make sure […]
Price “engines” – the tools for setting price levels
“How much shall I charge?” is probably the most common question we get asked. After all, most people think that’s what pricing is all about. As pricing professionals we know better. Price levels are an outcome of many factors, including strategic objectives, value creation, competitive positioning, segmentation, price structure, etc. However, at some point of […]
Juggling A Myriad of Software Pricing Models
I live in New York City where owning a car is a very expensive proposition. Fortunately, for those of us who don’t leave the city for work every day, there are plenty alternatives for getting from point A to point B, so that owning your own car isn’t really necessary. There has always been great […]
Spirit Airlines – Pricing lessons from a disrupter
With the summer travel season behind us, we thought it would be interesting to analyse the pricing strategy of Spirit Airlines. Here you have an airline that defies common sense: As Business Week* puts it, “the most hated airline is also the most profitable.” How can this be? Let’s first look at the profitability part […]
Loyalty or Marginal Revenue?
One of the toughest pricing decisions faced by companies is how to trade off the long-term benefits of customer seniority versus the short-term benefits of immediate higher marginal profit by auctioning inventory to the highest bidder. In this newsletter we’ll explore the impact of these decisions with two industry examples, and under what context favoring […]
Apple’s Pricing Strategy and the Importance of Understanding Value
Even in the post-Steve Jobs era, Apple is thinking differently from its main competitors – in this case relating to pricing. While at first blush Apple’s rumored pricing for the new iPhone 6 seems to be going against the grain, it is actually following best pricing practices. Judge for yourself…. The media reported that Apple […]
Freemium – the answer to B2B digital adoption?
We are getting a lot of questions lately about Freemium and whether it is a good idea for selling B2B digital content. Also, we find that often the term Freemium is being confused with Free Trial, i.e. giving someone a limited time to try a product or service for free, before charging. So let’s take […]
Another Look at Uber’s Surge Pricing
Last March Abbey Road Associates shared a point on view on the merits and drawbacks of surge pricing. We pointed out Uber’s poor communications about their surge pricing policy, and their failed attempt to recover from customer blowback, with an overly defensive response replete with fancy graphs and analysis. We suggested that better communications up […]
Will Cut-price Online College Degrees Save Higher Education?
Are college costs reaching a breaking point? That’s the headline of a Businessweek article from this past summer, published just about the time when fall tuition payments were due. With two kids in college and a third starting next fall, these types of headlines usually get my attention. It’s no secret that annual tuition and […]
Inertia and sloth – effective switching barriers
Recently I decided to shift a domain name that I’ve parked for years from one of the largest name registrars to a smaller one. The reason was a major price difference of $25/year – the larger one charged $35/year, the smaller one $10/year. So why have I waited so long to switch? The answer is […]