Critical Pricing Concepts and Strategies All Pricing Experts Should Know 👨💼
What are the most critical pricing concepts and strategies pricing experts should know to make more profitable pricing decisions?
Well, there are tons of books on the types of pricing strategy in marketing but only a few can stand the test of time and bring relevancy to a business’ price positioning strategy (whether you’re a digital, B2B or traditional brick-and-mortar retail business).
Keynote pricing books can show you how to communicate and capture value through better pricing which is one of the biggest challenges businesses face when they develop pricing strategies for highly competitive markets.
A good pricing book is important to read because it can teach you about the fundamental principles and frameworks to build a profitable pricing strategy.
There are some good pricing books out there that will help you create a product/market strategy for new and existing products; giving you a unique pricing perspective to attack many pricing obstacles.
So in this article, we’ll discuss some of the best pricing books out there – i.e., those that give you practical solutions to real-world pricing challenges that you face everyday. The books provide you with advice from some of the leading pricing experts on burning pricing topics such as:
- How to set prices for new products without pricing too high or too low
- What are the most effective pricing strategies
- Price list management and optimisation
- and how to drive price changes without losing volume during a critical price rise situation.
At Taylor Wells advisory, we strongly believe that, for any pricing manager and corporation seeking to improve their pricing skills and bottom-line profitability, reading keynote pricing books will certainly help you to take the leap in the best way possible.
Here are some of the top recommended books on pricing:
There are a lot of books out there about pricing. Truth be told, some more readable compared to others. Below are 8 recommended books that you can read on pricing concepts and strategies:
1. Negotiating with Backbone: Eight Sales Strategies to Defend Your Price and Value
by Reed K. Holden
This is a complete guide and a must-have for every pricing professional, even customer-facing professionals, and also any executive that wants to understand value-based pricing. The second edition has updated powerful new strategies and tactics – providing you with the resources to protect your profits and procure that deal.
The eight strategies (for all kinds of pricing negotiations) defined in the book are the tools that help you to know your buyer, build your foundation of value, enable you to avoid discounting and create “give-get” options, and also value-added services.
Dr Reed K. Holden is the CEO and also the Founder of Holden Advisors. He’s a world-renown pricing expert that guides clients to develop “bang-on” strategies to drive profitable growth, price leadership, and selling backbone.
2. Confessions of the Pricing Man: How Price Affects Everything
by Hermann Simon
Hermann Simon is probably the world’s first and most established pricing expert.
The book defines pricing as a ‘cocktail’. Also, it discusses all the vital tools for success such as economics, psychology, strategies and incentives.
The author talks about some personal experiences he learned about value, people’s perception, and how people gain from it. As people say about it, “You will never look at pricing the same way again”.
3. Pricing for Profit: How to Develop a Powerful Pricing Strategy for Your Business
by Peter Hill
The most important factor that impacts a business’ profitability is correct pricing. Thus, this book teaches you to stand firm in the face of pressure. Don’t let excessive discounts be the first move in order to compete. Additionally, this book is easy to read and serves as a practical guide and uses real-life examples.
If you utilise the strategies provided in the book, it would make a big difference to your bottom line, providing strong business growth.
Peter Hill is a partner in Mark Holt & Co Chartered Accountants and Healium LLP. He is an expert in his field. He worked in hundreds of companies, wherein price was the key factor to the success (or failure) of the business in all of them.
4. Pricing: The Third Business Skill: Principles of Price Management
by Ernst-Jan Bouter
This book outlines the requirements for pricing strategies and tactics. Also, it gives insights on what a pricing organisation should be, in a precise manner.
There are understandable instructions on setting optimum selling prices and high-quality pricing function.
The real-life companies’ business models include Google, Apple, BMW and LinkedIn. Therefore, it’s an inspiring book and clears the vagueness of the pricing function.
Ernst-Jan Bouter works for both start-ups and multinationals and is a price management genius. In addition, he specialises in organising companies to attain lasting enhancements in their pricing capability.
5. The Psychology of Price: How to Use Price to Increase Demand, Profit and Customer Satisfaction
by Leigh Caldwell
This is a great book for beginners. It explains the logic about the topic, clearly explaining applied strategies and techniques. Also, it provides help to businesses in understanding consumer behaviour and attain higher sales. In fact, it includes an instruction guide to work out the price point for any product.
Leigh Caldwell creates a strong and clear picture of how price psychology works. The book teaches people how to apply price psychology in everyday life. Therefore, there’s something for everyone in this book.
6. Brilliant Selling: What the Best Salespeople Know, Do and Say
by Tom Bird and Jeremy Cassell
This book is easy to read and lets the reader get inside the mind of both the seller and buyer.
It’s full of logical tips and advice from the best business professionals. The book can be used as a guide for those new to selling and a reference book for more experienced ones.
The book begins with a section on “you” and teaches how your own goals, personality, thoughts, and morals affect your ability to sell. It points out the need to always look for feedback and self-assess what was good and what could be done to make your negotiations better.
This book is a good start to improving your sales techniques during difficult price discussions with customers.
7. Pricing Strategy: How to Price a Product
by Bill McFarlane
An exceptional (also a very reasonably priced!) book. It provides nine rules and other lessons on how to price a product. You’ll find at least one strategy suited to increase your sales and profits.
It also clearly explains how increasing your prices might be the best thing for your business. Thus, the author really knows how to keep you glued on pricing concepts and strategies.
8. Pricing Strategy: Setting Price Levels, Managing Price Discounts and Establishing Price Structures
by Tim Smith
The author examines the marketing, strategic, financial and economic issues you will need to weigh up in making your pricing decisions. Also, the book illustrates numerous relevant case studies, worked examples and graphics.
- While most books are written from theory or conjecture, a really good pricing book is written from the account of evidence, experimentation and expertise.
- To set the right price, you need to find out the positioning of your products/services and how the customers perceive your products/services from multiple angles. From here, you will learn how to set the right price using sophisticated pricing techniques and using customer and price segmentation. This is what pricing books are all about.
- Trying to understand the buyer’s perspective is difficult to do. Most pricing books will give you a glimpse of the buyer’s position, but not the total picture – that requires you to test and trial these pricing concepts and strategies in your business. Remember these books are pricing tools, they help you understand what you could do with pricing if you have full knowledge.
Setting prices for your products can be challenging. Set prices too high, and you miss out on valuable sales. Set them too low, and you miss out on valuable revenue.
Pick up a book or two or read all of them to ensure that you are charging the right price for your products/services.
Most pricing books talk about how to set prices for your products/services beyond cost plus. In effect, understanding the profit value delivered from pricing should be a key consideration as well. Without real dollar examples of ROI delivered, pricing concepts and strategies have limited value. Therefore, as a leading pricing expert or pricing manager, you need to take what you learn from pricing books and rigorously analyse price optimisation or price improvement projects in relation to the profit they generated to show the board why they should be investing in pricing or a pricing team.
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