SmartPulse — our weekly nonscientific reader poll in SmartBrief on Leadership — tracks feedback from more than 210,000 business leaders. We run the poll question each week in our e-newsletter.
How rigorous is your approach to pricing your products or services?
- Very — we’re pretty analytical and rigorous about it: 58%
- Somewhat — we do some analysis and occasionally focus on it: 29%
- Not very — we infrequently analyze and focus on pricing: 8%
- Not at all — we slap a price tag on it and sell, sell, sell!: 4%
The Power of Pricing. An occasional focus on pricing isn’t enough. It’s perhaps one of the biggest improvement levers you have at your disposal. For traditional businesses, a 1% pricing improvement can yield a 10% profit improvement. How can you afford not to be rigorous about pricing? Not only should you evaluate how much you’re pricing – you should also consider your pricing model. The way you price your products could be less than effective. Invest the time in looking at your pricing model and the actual prices themselves. You (and your shareholders) will be happy you did!
Mike Figliuolo is managing director of thoughtLEADERS. Before launching his own company, he worked at McKinsey & Co., Capital One and Scotts Miracle-Gro. He is a graduate of the U.S. Military Academy at West Point. He’s the author of three leadership books: “One Piece of Paper,” “Lead Inside the Box,” and “The Elegant Pitch.”