Customer Reviews

The 1% Windfall: How Successful Companies Use Price to Profit and Grow

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"Challenges the concept of what most firms default to...The good, ol' Cost-Plus methodology.
While Cost-Plus has its merits, author now directs us to refocus on "Value-Based Pricing" and to create "pricing blossoms" that allow us to have inplace strategies for decreased demand, or inflationary situations.
A great resource to keep around because I guarantee that many of your key players are not aware of your pricing strategy and are not able to effectively communicate that in the marketplace!"

Rafi is the guru on pricing as he has been consulting on it for over 20 years. His previous book , The Art of Pricing, was a good book, but this one goes much further into the topic with great examples , worksheets and a step by step plan for a pricing strategy . Did you know that when it comes to pricing there are :

* Four fundamental pricing strategies
* Fifty pricing tactics
* Two offensive pricing blossom (his model) strategies
* Six defensive pricing blossom strategies and
* Thirteen culture-of-profit principles?

This is a very thorough study and it is so clearly written that you can read it like a novel. I could not put this one down. It is the best writing on pricing I have ever come across. if you run a business you need this book.

Great job of making pricing concepts "actionable" for managers. Interesting stories, focus on earning new profits, and straightforward advice.

The author also wrote an interesting article - "Ditch the Discounts" - in the Jan/Feb 2011 Harvard Business Review.

The Name of and concept for the book is a bit of a gimmick. I was concerned that the whole book would really be dedicated to increasing prices by 1% to realize a "windfall". Luckily, that is not the case. In fact, that concept is but a very small portion of the book.

This book is fantastically detailed and encompassing for the field of product/service-pricing. It covers all of the different pricing strategies and goes over how to evaluate and implement them.

I HIGHLY recommend anyone who plays a role in produce or service pricing read this book. My only complaint is that I would've liked to have seen a bit more information on the differences between pricing in different business models.

Very insightful. As a CFO and business consultant, I am thrilled to see such a comprehensive and well written book on the subject of pricing. The fundamentals, calculations and insights into human behavior are revealing. Great lessons to be learned.

Don't be misled by the title that increasing profits is as easy as raising prices 1% across the board. It's not that simple! Of course, setting prices arbitrarily is easy, but as Rafi Mohammed so clearly demonstrates, setting prices to maximize profits by capturing the whole spectrum of value is an art. With different people placing different values on all kinds and aspects of products and services, setting prices should be a much more complicated and challenging process than is generally realized. This book navigates the reader through the process with accessible strategies and illustrations of how to maximize those unrealized profits. As a new business owner, I have found this book to be an extremely valuable tool as I make my pricing decisions.

Of marketing's 4P's the one most neglected is price. Hopefully this book will change that.

Rafi Mohammed makes a compelling case that price is the element of the marketing mix that can have the most immediate near-term impact on a company's profitability. He amply demonstrates the leverage that even small changes in price have on the bottom line, showing case-by-case the staggering gains which can come from smarter pricing for well-known companies. He also shows how these gains can be had for any company, regardless of size.

The gains, however, are not "windfalls" under the classical definition of something unexpected or unearned. The book respects the critical thinking which must be applied to the process of getting into the heads of customers to capture not only mind share but market share.

Rafi's approach to pricing is refreshingly customer-centric. He starts with the basic premise that effective pricing requires thinking like a customer. He continues with lessons on understanding a company's value proposition to diverse customer segments based on the circumstances of time and place. His book is complete with clear and practical examples of how to create comprehensive strategies and tactics to drive more sales at greater profit.

Probably the most valuable aspect of the book (aside from elevating the importance of price to the marketing mix) is the very thorough discussion of numerous methods and models which can be used to offer customer-friendly choices. Multiple chapters are devoted to thought-provoking alternatives utilized in a variety of contexts to assuage customer's fears of spending, e.g. "I'm interested in your product, but concerned about performance." He examines concepts such as versioning, bundling, and price differentiation. He explores how and when they can be successfully deployed to create win-win situations for companies and their consumers.

The book is accessible and engaging. Rafi has succeeded in writing a book that not only elevates a concept, but educates about its application.

Dr. Mohammed's presents a compelling and practical case for a win-win pricing strategy. His book outlines clear steps to reveal opportunities for growth and profit. Practical and impactful!

I was trying to explain these concepts to my wife, but I can't really explain it as well as Rafi did in his book, so I made up this little story - she got it right away.

Example: A can of Coke; - You are at the beach... You arrive at the beach at 9AM - temperature is 60 degrees, want a Coke? How much will you pay? vs. 2PM, you've been there all day, and it is now 90 degrees. How much is that can of Coke worth now when the kid with the cooler ambles by? (And what if the cans were dented or past the sell-by date - i.e. markdowns?) Actual cost? About 18 cents So, cost (18 cents) is not the issue; value to the customer is. When the kid tells you how much that Coke is, do you think 18 cent cost? Heck no! You wonder if you have enough to buy everyone in the family a soda!

Or, price at a Target ($.31) vs price at a McDonalds ($1.29)... 2 of the bigger companies in America, two very different prices for a 12 oz. Coke - the same product, a 12 oz coke! (OK, so not exactly the same...but good enough for an example OK?)
This book is filled with dozens of strategies and techniques that will help you get away from cost plus pricing and into value based pricing. I'm a retailer, my products generally sell at 2 x cost. But do I have to?

As a business professional, I am constantly scanning new business publications for information on effective pricing methods. After trying different techniques of improving the company's profit margin through trial and error, we are now looking at trying some of the very interesting and different formulas proposed in the newest book by pricing expert Rafi Mohammed. The secret art of price setting is explained systematically throughout every chapter, and yes, there is a system. The formula for finding the right price for a product isn't exactly rocket science, but there are some concrete basics provided in this book.

As a sequel to "The Art of Pricing", "The 1% Windfall" offers useful insights into strategic pricing by portraying real life examples coupled with actual solutions. By making the tiniest changes in pricing tactics, the book shows how a small company can suddenly find itself bringing in significant profits.

I learned that one way of implementing profitable pricing is by increasing prices by as little as 1%. The surprising results of that method and many more are revealed in this book. His recommendations appear to be based on a solid foundation of proven business tactics and formulas, using successful past examples, that can be implemented by every type of business across the globe.