David Falzani is a CEO at Polaris Associates and a Professor at Nottingham University.

In this episode, David discusses the strategy for driving higher pricing by understanding the value delivered to customers. He also dispels the myths surrounding the notion that high pricing lowers sales, sharing the results of experiments conducted with various companies that prove otherwise.

 

What you will learn from this episode:

• Learn how to achieve profitability without constantly chasing pricing
• Find out the underlying reasons for underpricing and dispel common misconceptions about the negative impact of higher prices on sales
• Discover experiments where doubling your price yields significantly higher profitability compared to low pricing strategies

 

"Think dynamically about price and do it often."

- David Falzani

 

Topics Covered:

01:42 - Expounding on 'sustainable wealth creation'

02:54 - What caught his interest in pricing

04:36 - Three reasons why underpricing exist

06:48 - Emotional baggage and fear that comes with underpricing

08:13 - Frequency of price changes and increase

09:37 - 12 exercise the book suggests you can do to revisit your pricing strategies

12:13 - What makes companies lose confidence in pricing higher

14:37 - How to be profitable without chasing price all the time

17:01 - A case of a perfect example of understanding the relationship of pricing and customer value: Apple versus Android

18:21 - Why double your price? [And experiment you can do]

22:59 - Light double your price [an experiment for the more risk -averse]

24:29 - Looking at the numbers in terms of feasibility of price increase

26:57 - Busting myths about pricing higher

29:24 - David's best pricing advice

 

Key Takeaways:

"The frequency of revisiting your pricing decisions. Every time you revisit it, do something different, use a different piece of analysis." - David Falzani

"Don't just go and revisit the same comparison to competitors or if you are using cost- plus, which I hope you're not. Think about the frequency at which you are reviewing those pricing decisions." - David Falzani

"The more you look at pricing, the more questions that are raised, the more you start to educate yourself about your own customers, your clients, the market, competitors, and all those dynamics." - David Falzani

 

People/Resources Mentioned:

• Thinking, Fast and Slow by Daniel Kahneman: https://www.amazon/Thinking-Fast-Slow-Daniel-Kahneman/dp/0374533555

 

Connect with David Falzani:

• LinkedIn: https://uk.linkedin.com/in/davidfalzani

 

Connect with Mark Stiving:

• LinkedIn: https://www.linkedin.com/in/stiving/
• Email: [email protected]