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Blink 3 of 8 - The 5 AM Club
by Robin Sharma
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Pricing For Profit summary
Peter Hill
How to Develop a Powerful Pricing Strategy for Your Business
8 mins
Brief summary
Pricing For Profit by Peter Hill is a practical guide to pricing strategies for businesses. The book explains how to calculate costs, analyze pricing data, and determine the optimal price point to maximize profit.
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Pricing For Profit
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Key idea 1 of 4
A price raise is the simplest and most effective way to increase profits.
Most business owners are skeptical of the notion that raising prices will boost growth. But in fact, there are four common ways to grow your business and a price hike is a pretty good choice.
The four most popular strategies for growth are increasing your customer base, increasing the value or rate of transactions, achieving greater operational efficiency, and, finally, increasing your prices. So, while many businesspeople think that hiking prices will lead to fewer customers, that’s not quite the reality.
For instance, one survey that compared the reasons customers ceased purchasing a product found that 68 percent of those surveyed stopped because of what’s known as perceived indifference. This means that they felt they weren’t being cared about enough, as evidenced by things like poor customer service. Not just that, but only 10 percent said they stopped purchasing because of higher prices.
So, why wouldn’t you increase your prices when it’s such a simple way to grow?
After all, even making small price increases can significantly impact your company’s growth. For instance, investing in greater marketing efforts takes longer and costs more than a simple price raise. That’s because marketing investment might require lots of new print materials, staff or technological purchases.
On the other hand, just a minor price increase can mean huge benefits at a fraction of the cost. For example, say you’re selling 5,060 used phones a year at an average of $198.45 per phone. If you raise your price per phone by just 2 percent, or $3.969, your annual profit will rise from $1,004,157 to $1,024,240. That’s about $20,000 added profit!
That being said, there are some important considerations to make when setting a price, which is exactly what we’ll explore next.
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What is Pricing For Profit about?
Pricing For Profit (2013) is a practical strategy guide for pricing. These blinks use real world business examples to paint a comprehensive picture of how to optimize your pricing and maximize your profits.
Pricing For Profit Review
Pricing For Profit (2021) is a valuable resource that delves into the intricacies of pricing strategies and their impact on business profitability. Here's why this book is worth reading:
- With its insightful analysis and practical techniques, it equips readers with the knowledge to optimize pricing structures and maximize profits.
- Backed by real-world examples and case studies, the book offers a comprehensive understanding of pricing dynamics in various industries.
- By uncovering the hidden factors affecting pricing decisions, it offers a fresh perspective that keeps readers engaged and ensures the subject matter is far from mundane.
Who should read Pricing For Profit?
- Any business owner who is concerned about their company’s lackluster growth
- Every entrepreneur and anyone who sells anything
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Pricing For Profit FAQs
What is the main message of Pricing For Profit?
Strategic pricing is key to maximizing profitability in business.
How long does it take to read Pricing For Profit?
The estimated reading time for Pricing For Profit varies. The Blinkist summary can be read in just 15 minutes.
Is Pricing For Profit a good book? Is it worth reading?
Pricing For Profit is a valuable read for business owners. It offers practical insights on pricing strategies.
Who is the author of Pricing For Profit?
The author of Pricing For Profit is Peter Hill.
What to read after Pricing For Profit?
If you're wondering what to read next after Pricing For Profit, here are some recommendations we suggest:
- The 1% Windfall by Rafi Mohammed
- The Strategy and Tactics of Pricing by Thomas Nagle
- Priceless by William Poundstone
- Profit First by Mike Michalowicz
- How Brands Grow by Byron Sharp
- The Stoic Mindset by Mark Tuitert
- The Power of When by Michael Breus
- How Highly Effective People Speak by Peter Andrei
- The Psychology of Selling by Brian Tracy
- Good to Great by Jim Collins