Tuesday, October 24, 2006

The Art of Pricing

Setting fees is like having a root canal. No one wants to do it but ultimately, it has to get done. If you feel like that, then you're gonna be happy about my book review.

Rafi Mohammed is the author of The Art of Pricing, an easy to read and understand guide to the basics of pricing strategy. OK, I know that sounds technical, but it's not.

Rather than snatching a price from thin air, or worse, selecting one because someone else is charging that, this book offers tools like the Value Decoder to determine a good price for your services.

What I liked most was the notion that there are tremendous hidden profits (yeah-I said profits) left on the table because most providers tend to think in binary terms, ie. it's either this or that.

For example, Rafi helps a restaurateur who must decide to charge $18 or $33 for an entree. the owner believes his restaurant should be positioned in the market as either as an affordable place ($18- still pricey in my book) or as a celebration destination ($33).

Rafi illustrates that flexibility is critical. There are many segments of the dining market the restaurant owner can serve. He can have an early-bird special at 5 p.m. for $12 or an ultra-sophisticated Chef's tasting table that encourages gourmands to meet with the chef for say $75 an entree. At each price point, diners pay for what they value most whether that's saving money by eating early or gaining the cache of dining with the chef.

What does this mean for you? These ideas absolutely apply to the mediation market space. Go to the library and get this book. You won't regret it and neither will your wallet.

We'll be talking about pricing more as Setting a Fee that Feels Right & Still Makes Money draws closer (Nov 30th 3 p.m ESt, 12n PT). Mark Silver, guru of HeartofBusiness.com will share his knowledge on setting fees with heart. You know how popular this call will be-- grab your seat now!

Try. Fail. Learn. Grow!



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