Pricing the Last Piece of the Puzzle

Prices Are Falling

It’s the most discounted time of the year, and so in this 19th episode of the Pricing Evolution Podcast, we look at why brands and retailers run discounts. I list eight reasons why businesses have discounts and talk about the benefits and pitfalls of each. Thanks for reading PricingEvolution! Subscribe for free to receive new posts and support my work. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.pricing-evolution.com [https://www.pricing-evolution.com?utm_medium=podcast&utm_campaign=CTA_1]

Pricing the Last Piece of the Puzzle

What’s the common thread between that acquaintance who likes to tell you about how he got a huge payment from the developers who wanted to cut down the trees at the edge of his property and the AI scientists that Meta is offering $100 million pay packages? It’s that being the last piece of the puzzle, which allows a larger project to get done, creates a unique pricing power. In this episode of the Pricing Evolution podcast, I go through examples ranging from real estate and programmers to rivets, discussing when small components in big projects have outsize pricing power, and when they don’t. Links: Pricing Evolution: The Power of Low Dollar Pricing [https://www.pricing-evolution.com/p/the-power-of-low-dollar-prices] WSJ article on Meta offering AI scientists on “the list” of top talent up to $100M to join their AI development group [https://www.wsj.com/tech/meta-ai-recruiting-mark-zuckerberg-openai-018ed7fc?st=KDAKQB&reflink=desktopwebshare_permalink]. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.pricing-evolution.com [https://www.pricing-evolution.com?utm_medium=podcast&utm_campaign=CTA_1]

Interview: Value-based Pricing with Doug Mullett of Forthright LED

This latest episode of the Pricing Evolution Podcast takes a different format from usual. It’s an interview with Doug Mullett, the founder and owner of Forthright LED [https://forthrightled.com/]. Doug sells LED lighting to larger commercial buildings like warehouses and factories. His typical customer is lighting an indoor space larger than a football field. He’s not a trained pricer, he’s an entrepreneur running his own business, but I was struck by how he talked about pricing in his posts on LinkedIn. And after we’d talked, he agreed to come on and talk about his business and how he prices and sells his products. There are several key lessons I’d highlight from Doug’s business which would apply to other businesses: * He’s clear on what types of customers are willing to let him compete on value rather than price, and he simply does not deal with customers who are only interested in price. (He doesn’t answer RFPs.) * He recognizes that customers want to hear about the savings he can deliver and the price for his products first, so rather than a long proposal with the price on the last page, he starts with the money saved and the price it will cost, and then provides the background. * He focuses on the key value he can deliver customers: Saving energy if they are converting from incandescent to LED, and providing greater brightness if they are upgrading old LEDs. He focuses on those customer-centric value measures rather than other metrics that people have more trouble understanding. I always think it’s interesting to get a look into a type of business I haven’t thought about before, and I hope you’ll enjoy this conversation as much as I did. And if you need to light a large commercial space, give Doug a call [https://forthrightled.com/]. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.pricing-evolution.com [https://www.pricing-evolution.com?utm_medium=podcast&utm_campaign=CTA_1]

The Model T: How Pricing Created the Auto Industry

In 1905 there were less than 100,000 total cars on US roads, and the price of a car was 2x-3x the average annual wage of a US worker. That means that in terms of the years an average person would have to work to buy a car, the cars of 1905 (which had about the power of a modern lawn mower and a top speed of perhaps 30 miles per hour) took as long to save up for as a modern Corvette Z06 Supercar or Porshe 911 Turbo. This all changed with the Ford Motor Company as with development of the Model T Ford. The Model T was the first truly mass produced car, and after launching in 1909 at a price of $850 (about $30,000 in today’s dollars) Ford developed efficiencies which allowed it to drop the price of a Model T to $260 by 1925. Given that by 1925 the average US worker make $1,200 per year, that means that a Model T was equivalent to less than three months of wages for the average American. And a result, sales went from thousands of cars a year to millions. In this week’s episode we look at how passing on the savings from manufacturing efficiency can turn a tech product enjoyed by the few most fanatical fans into a mass market phenomenon. And after looking at this trend in the early days of automobiles, we examine it in personal computers and smart phones. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.pricing-evolution.com [https://www.pricing-evolution.com?utm_medium=podcast&utm_campaign=CTA_1]

You've Got (Tariff) Trouble

This pricer has seen too many pundits pontificating that the economy had adjusted to tariffs and we can see that because the stock market is back to where it was on April 2nd before President Trump announced his reciprocal tariffs on countries across the world. I discuss the speed at which companies are actually adjusting to tariffs and how it will be 3-6 months before you can really expect to see the effect of tariffs on what’s on store shelves and price tags. I also describe how companies are still in the process of figuring out what the full impact of tariffs is on their costs because there are many layers of suppliers many of whom have not yet responded to the tariffs. This is a little closer to opinion journalism than most of the podcast episodes, and I’ll try to be back at the end of the week with another episode that has fun and interesting insights into pricing dynamics, but in the meantime, this is a pretty real view into the things that pricers and other people at the center of the tariff maelstrom are seeing. Please share this post with others who might be interested! This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.pricing-evolution.com [https://www.pricing-evolution.com?utm_medium=podcast&utm_campaign=CTA_1]