Category: Game Changer Book
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All Eyes on Pricing
In: Pricing Strategy
In most of our newsletters, my colleague Arnab Sinha and I have focused on the nature of the seven games in the Strategic Pricing Hexagon. Today we focus on the individuals and teams that play the games day in and day out. They are the ones who wield the power behind our definition of pricing…
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Why you should leave money on the table … on purpose
In: Fairness
Charging prices that are fair and profit-optimal seems like a contradiction in terms. The pricing maxims of “extract full value” and “maximize profits” are not exactly customer friendly. A “fair price,” meanwhile, is not only a fuzzy concept that defies definition under classical economics. It is also an intensely visceral concept for primates – and…
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Cutting Through the Fog of GenAI Pricing
In: Gen AI Technology
Cutting Through the Fog of GenAI Pricing It’s been a little over a year since ChatGPT marked a watershed moment for GenAI and became the most rapidly adopted application of all time. Hardly a day goes by without a forecast of the potential for GenAI to transform how companies will research and develop products, interact…
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How Americans Can Tame Their Tipping Craze
Tipping isn’t a big deal in most of the world, but it is a seemingly intractable cultural norm in the United States. The long history of tipping in the United States – as this short animated video shows – has established an awkward equilibrium that binds restaurant owners, their service staff, and their customers together.…
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Winning the Dynamic Game
The pricing of generative artificial intelligence (GenAI) applications is a hot topic. Microsoft revealed its vision for its Copilot “digital companion” last month and affirmed price points of $30 per month for enterprise customers. But the critical question for software companies and platforms providers at this stage should not be “how much should we charge?”…
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Exploring the Fair Value of Work
How much is your work worth? That is the pricing challenge almost everyone confronts personally. The wages people receive are the prices set for their work. That applies to the current tense negotiations between the United Auto Works (UAW) and the car and truck manufacturers in the United States as much as it does to…
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Winning the Custom Game
Imagine going to the store to buy your favorite breakfast cereal – a classic Uniform Game product – but instead of paying the price displayed at the shelf, you negotiate the number of flakes in the box, customize your own mix of fruit, nuts, and sweetener, demand a special container and dispenser, and ask for…
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Winning the Power Game
One of the most enduring clichés in marketing is that “the market sets the price.” Business leaders may feel they lack pricing power in the conventional sense, because they don’t have obvious differentiation or loud competitive advantages. This is especially true when the market is highly concentrated on both sides. The outcome of every deal…
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Winning the Cost Game
If pricing professionals brainstormed for a slogan to put on mugs and t-shirts, we’re confident that “Never Use Cost-Plus Pricing!” would make their short list. The critics call out the simplicity of the approach. How can the fusion of only two numbers – a cost and a target margin – possibly serve a company well…
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Winning the Uniform Prices Game
Imagine how frustrating day-to-day shopping would be if you had to haggle over every single purchase instead of paying what’s on the price tag or the price list. For the last 150 years, uniform prices have made commerce more efficient for consumers and businesses, because they often foster a sense of fairness and make prices…
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Welcome to The Game Changer Newsletter
What is your pricing strategy? Business leaders often answer that question by citing a method such as “charging what the market will bear” or applying a markup to costs. Some leaders emphasize goals such as “profit maximization” and “optimal value extraction.” These pricing strategies have one thing in common: they are number traps. Each lures…