Customer Reviews

The Art of Pricing: How to Find the Hidden Profits to Grow Your Business

5 star:		(18)
4 star:		(2)
3 star:		(1)
2 star:		(0)
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This is the first book I've read on the subject that is accessible to anyone with an interest in pricing; no daunting formulas or mathematics. Dr. Mohammed provides an excellent new perspective on the practice of pricing grounded in classic microeconomic priciples. As such, through a down to earth writing style and myriad examples, he liberates the reader from the notion that there is one right price for an item or service.

This book was a delightful read not only because it was short and to the point, but also for it's many real-life examples. I've felt for a long time that prices need to be set to the customer's perception of the value of the product or service, so it was very encouraging to read a book where the author was able to break down the reasons and supply applications for this type of pricing he calls "Value pricing". As with an auction (a theme covered in the book) there is a price for every interested buyer, but it is not always the same for everyone. Just as only one person is willing to pay the highest "winning" bid, there are those who will pay more for any product or service than the average customer. This book helps you to identify those people.
Rich

If you are new to the field of pricing this book will help you start asking some of the right questions about how to establish a pricing system in your organization. For those of you that have had some experience in the field already it will draw your attention again to the fact that price differentiation has a much larger impact than statistical price optimization.
The book is full of fun examples and is a quick read.

Setting pricing can be a daunting task but Rafi breaks it down into easily understandable chunks of information. Instead of pricing your products and services based on costs, think about the value that it provides to your customer and base your pricing on the Value Decoder that's in this book.

If there is any book you want to read about pricing strategies, this is the book.

Rafi's treatment of the subject of pricing was just what I needed to open my eyes to a whole new set of strategies for increasing profits. As a former Corporate Engineer and Manager turned entrepreneur, I needed a more thorough understanding of pricing and found exactly what I was looking for in The Art of Pricing. I appreciated the easy to read and entertaining writing style along with the many examples presented in the book. Books that make it easy for me to remember new concepts also make it easier for me to quickly apply those concepts in real world situations. I will be honing my new pricing skills for years to come. The Art of Pricing has become one of my favorite books to recommend to others.

Key to Mohammed's thinking is to set different prices for different customers having different valuations of what they are willing to pay - eg. matinee and evening prices for movies, early-bird prices at restaurants, discounts for those willing to order airline seats ahead of time.

To minimize sales staff giving away profits it is useful to show them the differential profits/product (and hopefully link their compensation to the firm's profits). Beware of sales-boosting gimmicks (eg. frequent-flyer miles) that can be "gamed" by focusing on high-volumes of low-cost purchases. One can test different strategies via eg. varying coupon offers placed within catalogs.

Other important concepts include add-ons (warranties, financing), differential pricing according to location, and taking a long-term perspective (eg. fairness during disasters and temporary product shortages).

"Cost-plus" pricing is not one of Mohammed's recommendations - however, it is increasingly utilized by successful low-cost retailers such as Costco and Wal-Mart. Setting prices using data about alternatives/substitutes is a suggested approach - however, Mohammed does not go into eg. focus-group assessments of how much specific options or new products might be worth.

This book is essential in discovering perceived value vs. actual value. A great strategy book!

The suggestions about add-ons, segmenting your buyers and really trying to assess the value of your product when you price it were helpful. The problem of "goodwill" opened my eyes as I think this isn't an uncommon way that profits are bled from businesses. After reading this book, I'm really thinking more and more about getting to know my customers in terms of (1) what they want and (2) precisely how much they value my product. This is a great first step to obtaining optimal pricing. This book gets you thinking and can stir your creativity about how to better price your good/service.

This book has the perfect collection of clever anecdotes and real world advise for improving your sales. It was a true pleasure to read!
Rather than reading about theory, you are given REAL tools and ideas to get results.You also learn about companies that we all know who have "turned it around" using these tools. It's a must read for your entire team and company!

I am a small business owner and get involved in pricing daily. This book provided extremely useful insight into how to make the most money from each deal. An easy read about a topic that is all too often neglected by the small business owner.