The Price Isn’t Right
“We lose money on every deal, but we make it up in volume.” That cold joke was tossed around a dying company I worked for a couple of decades ago. Yet behind the gallows humor was a bare truth; the company was bleeding and part of the problem was in pricing our deals. Knowing what to charge is non-trivial, but survival-level important. This is especially true for start-ups: Price too high and you earn no revenues. Price too low and you slowly spiral into the muck of bankruptcy. Knowing what to charge for products and services is often treated like a voodoo ritual, where mystic insight from corporate elders drive the decision. I once took over a marketing department for a software company and asked the innocent question “How did you decide on the product’s price?” The grizzled CEO said “That’s what all products in this market cost.” Unsatisfied with … Continue reading →