Hill - Princing for profit: how to develop a powerful pricing strategy for your business

This ebook published in 2013 by

Kogan Page Limited

120 Pentonville Road

London N1 9JN

UK

www.koganpage.com

Peter Hill, 2013

E-ISBN 978 0 7494 6768 5

Contents

T hank you to my wife Sarah and children Oli, Charlie, Sophie and Georgia who put up with me during the many months it took to write this book.

Thank you also to the many businesses that have placed their trust in me to work with them on the various projects. These have formed the case studies and experiences which are the backbone of the material within the book. Thanks also to Sonja Jefferson, Robert Watson and Liz Gooster who were invaluable in the process of getting it down on paper.

I ncrease your prices increase your profits. It really is that simple. This book will show you how to do it, and give you the confidence to tackle a subject that is crucial to your business success, so let me be crystal clear. This stuff works. By adopting these simple ideas, every single organization I have worked with has seen dramatic improvements in their business. These range from significant increases in their bottom line profits, to being the difference between survival and failure.

In this introduction, we will consider:

• w ho should read this book;
• h ow best to read the book to ensure you get the most from it;
• t he relevance of the material to the real world;
• h ow people dont always focus on the key issues;
• t he difference between selling products or services.

Who should read this book

As a guide, this book has been written with the following people in mind: CEOs, finance directors, sales managers, marketing analysts, accountants and strategic planners, and anyone selling directly to customers, in organizations having between 1 and 10,000 employees. The techniques and ideas covered apply in manufacturing, retail, warehousing, transport, professional services, construction, and in every type of buy stuff sell stuff or buy stuff make stuff sell stuff businesses. It is also increasingly applicable to those government departments, schools, universities, hospitals and not-for-profit organizations that are finding themselves forced into developing more private sector elements to their activities.

Organizations come in all shapes and sizes. There are microbusinesses, often just a single person or husband and wife team running their business from home or a small shop. Everyone in this category will learn some great techniques and ideas to help them dramatically improve their approach to pricing and, as a result, their profits. Statistically, over 80 per cent of these businesses fail within their first three years. A focus on pricing would have been enormously beneficial to them, but sadly their business focus was almost always on non-pricing issues.

Then there are many established businesses often referred to as SMEs, or Small- and Medium-sized Enterprises. Whether just a handful of employees or hundreds, these are still predominantly owner-managed businesses with an entrepreneurial leader driving them. Those business owners will get huge value from this book, not only in terms of ideas and techniques they can apply, but also in understanding where the pricing issue gets lost in translation throughout their organization. Additionally, many members of their team such as finance managers or production managers will reap huge rewards from reading the book, and applying the ideas covered. Certainly anyone on the frontline, whether sales manager, shop counter staff or on-the-road salesperson, will get many great tips and techniques to use.

Lets call the final group Big Business . You may be the Chief Executive Officer (CEO) of a very large business, or the finance, sales or marketing director for example. This book will help you to see the simplicity of some pricing issues that often become lost when organizations reach a certain scale. This back-to-basics approach to pricing will be a good reminder or it may be a prod in the ribs to get your organization back on track on this all-important issue.

In reality, if you are involved in any area of business and want to improve your skills and develop personally so that you can add value to your organization, then you will benefit enormously from understanding and applying the ideas in this book.