Innovation often comes from looking outside one’s own industry. Caspar de Bono is part of the leadership team that led the Financial Times from a past as an advertising based print publication to a future as a subscription driven digital publication. This has generated enough additional cashflow to fund an increase in editorial investment. Pricing innovation was a critical part of this.

Pricing models are how you structure the pricing of your product or service. It is where all the different aspects of your pricing strategy and tactics come together. Here is a simple primer on pricing models and how to build them.

In many industries the pricing metric and even pricing levels are frozen accidents. They were established in the past for reasons no longer known and endure through convention. Look at your pricing and ask questions. “Why this pricing metric?” “Whose interests does this pricing metric serve?” “How does pricing shape profit pools?” Pricing’s past does not need to determine its future.

Many companies struggle with pricing alignment without even being aware it is an issue. In some cases there is confusion on goals, or perhaps too many goals. In other cases the different parts of the organization are pulling in different directions. You can get insight into pricing alignment at your company by having different people take a pricing self assessment and comparing the results.

The CEO should play a leading role in pricing strategy and demand a high level of execution. Pricing is too important to leave to experts. It is one of the most powerful strategic levers a business has. What are the ten top questions a CEO can ask to help improve pricing practices at their company?

Your customer touches you many times across the company journey. Are you creating value at each touch? Are you communicating your differentiated value? Pricing power comes from differentiated value, but this only matters if you communicate that value.

The Professional Pricing Society annual Spring Conference and Workshops was held in Chicago May 2 to 4 of 2018. Ibbaka presented the preliminary results of its research with TeamFit on the skills of pricing experts. We also introduced our pricing Self Assessment tool. Both were well received. Tim Smith of Wiglaf Pricing presented a well thought out way to structure the Pocket Price Waterfall and connect to pricing governance. Simon Kucher Partners had a good talk on connecting pricing to digital transformation.

Willingness to pay (WTP) is one of the most abused terms in pricing work. Lazy consultants use it as a proxy for value. It is not. Market researchers think of it as something to be measured. Pricing strategists look for ways to shape WTP through marketing segmentation, value communication and a pricing model that connects price to value.

Tom Nagle basically defined strategic pricing, developing the core ideas and frameworks used today to understand differentiation value, construct a pricing strategy and execute on pricing in the field. Ibbaka spoke with him about the skills needed for pricing expertise.

Pricing thought leader Tim Smith share his insights into the skills required for pricing expertise and how he trains people to move freshly minted MBAs to pricing analysts to pricing consultants. He also speculates on how pricing software will need to evolve to meet market needs.

Willingness to Pay (WTP) is one of the most popular, and slipperiest concepts, in the pricing world. Three key things to remember: (i) WTP can be shaped, it is not a given, (ii) WTP is a distribution and not a point, (iii) the shape of the WTP distribution impacts your pricing strategy.

A/B testing has become a standard best practice in marketing. When and how should it be applied to pricing?

Even if you have a highly differentiated, value-added offer and are able to charge a premium without much customer pushback, your pricing should not aim to recoup the full value you create for your customers. Your price should leave a consumer surplus - that is, the customer should feel they are getting more value than the amount spent, as value perception is key to the sustainability of any good pricing.

Applying systems thinking to your business can help you see how the different parts reinforce each other. In The Amazon Way on IoT consultant john Rossman describes this as the flywheel. Design your pricing to make sure that flywheel keeps spinning and building momentum.

Good pricing design will encourage users to adopt tha behaviors that will create the most value for the user. Over the long run, that is what will build differentiation value and increase pricing power for the vendor. BJ Fogg and Nir Eyal provide models for how to do this.

In the Sixth Edition of The Strategy and Tactics of Pricing, Tom Nagle and Georg Muller introduce the Value Cascade. This is a powerful framework for identifying value and pricing leaks. Use it to ask yourself hard questions about how you create, communicate and capture value.

Pricing strategy and design work inevitably includes a lot of numbers. Too often, we focus on the numbers describing the numbers, averages, medians, standards of deviation. In most cases, the shape of the distributions is as important as the absolute values.

Pricing is a critical capability where the skills required are changing rapidly. TeamFit is partnering with Ibbaka to explore. Professional Pricing Society.

Change can be hard, especially pricing change, which touches on so many different parts of the organization and which requires buy in from your customers. What are the small steps you can take to get started on your pricing journey.

There is an unspoken discount that most SaaS companies are faced with. This is the risk discount. Buyers are not sure if your product will deliver the value you claim it will, and that they hope it will, so they levy a risk discount. One way to improve your pricing power and increase your price is to reduce this perceived risk.