“The single most important business decision in evaluating a business is pricing power, ” investor Warren Buffett said.
“And if you need a prayer session before raising price, then you have a terrible business”
- Pricing power is mission critical.
- Pricing power determines whether a business can achieve their desire prices.
- It also determines the degree to which a brand can earn a premium price.
What is pricing power?
Pricing power refers to a company’s ability to raise prices without reducing demand in their products or services. The more pricing power you have, the easier it is to raise prices.
Pricing power is dependent on the type of products you sell. Companies that sell exclusive products tend to have significant pricing power, while companies that sell more common products suffer from traditionally low pricing power.
Hotel bookings, flights, Uber rides—all of these products and services have pricing that is subject to change based on the scarcity of the good. For example, if it’s a peak hour for Uber ride requests in an area, the service will increase the price of a ride because there are fewer drivers available.
Scarce products have a lot of pricing power because there are limited resources as well as high demand. When a product becomes less scarce, it will likely lose some of its pricing power and see a decrease in demand.
But Vance, I don’t own a hotel, airline or ride hailing app, how can I achieve pricing power in my business?
Great question, glad you asked.
In this month’s Mouster Class for Inner Circle members, I am revealing how EVERYTHING in your business revolves around price, including:
- The lies marketers tell you about needing more leads and clients. I debunk them all
- How to raise prices without losing one client
- Why profit is the only metric that matters
- 8 ways to price and increase price, no matter what your competitors charge
- The most important aspect of pricing
- Price positioning: Should you be high, low or average? The answer will amaze you
- How price affects profit more than costs
- The 2 mission critical factors to setting your prices. Without these, you are doomed to a low bank account and dwindling customer base.
- How to use the awesome power of scarcity to command high prices
- How “place” defines price.
- Differentiation versus Discrimination: Should heavy people pay more to fly?
- How not to get caught in the Bundling, unbundling, volume and multi person pricing trap
And much, much more!
But don’t dilly dally, this months Mouster Class Blueprint goes into the DSNi vault at midnight on 4/30/21.
Take care of it here: https://www.deliverservicenow.com/invitation-to-become-a-dsni-inner-circle-cast-member/
And to show that I follow my own advice, the price of being a DSNi Inner Circle member is going up on May 1, 2021.
In other words your daily investment is going from the price of a Tall Starbucks to the price of a Grande.
If you join before 5/1/21, you will be grandfathered in for life at today’s investment into your business.
