Archive for 2005
2005: The Pricing Year in Review
As the New Year approaches, and “slow news days” become more common, it is customary for journalists and broadcasters to do their annual review of the year that has (almost) concluded. “No point re-inventing the wheel or breaking with tradition” I thought to myself when Tim Smith asked if I’d be interesting in contributing a…
Read MoreProfiting with Yield Pricing
Increasing numbers of companies are taking elements of “yield pricing” or “yield management,” a pricing strategy originally developed for perishable service sector products and adapting this strategy to new uses. Yield management as been used since the mid-80s in the lodging industries and in airline ticketing. The key variables are: (1) the perishable nature of…
Read MoreDifferential Pricing Needs More Than Differentiated Functionality
Why does the price of pen vary so much? Functionally, they are all simply writing instruments for applying ink to paper. We could describe them as recording devices to capture our thoughts for sharing with others or reviewing at a later time, yet this type of a description would only inflate the overall price level…
Read MoreThe Peril of Price Cuts
When I first started teaching marketing to DePaul University undergraduates, I used a textbook that had short one-page cases. In solving the problems and challenges presented in these cases, the students’ universal solution to virtually all the problems ailing any company was “to lower prices.” In reality, cutting prices is not only a lazy and…
Read MoreIncremental Improvement or Innovative Changes?
Every budget tells a story. They begin with dreams that rise in spite of challenging conditions. Line items are characters with specific actions and motives. The characters leverage each others strengths to address their common challenge. When the items coalesce, the challenge is slain and the characters live to fight another day. If budgets are…
Read MoreIs Sales/Marketing Budgeting Really a Necessity Or Is It Just a Big Waste of Time and Money?
With yearend approaching, many companies are thoroughly immersed in the annual rite of autumn – the sales and marketing budgeting process. Increasingly, experts are challenging the conventional wisdom of undertaking this time- and money-consuming process. Loren Gary, a frequent contributor to various Harvard Business School newsletters, observes “The average billion-dollar company spends as many as…
Read MoreCustomer Profitability A Key to M&A Success
Often overlooked by the numbers crunchers in the urge to merge is a crucial principle of modern marketing – analysis of customer profitability. The concept of customer profitability as it pertains to mergers & acquisitions (M&A) is advanced by Larry Selden (professor emeritus of finance and economics, Columbia Graduate School of Business and founder of…
Read MorePedantic or Socratic?
Are you pedantic or socratic when you sell? Which should you be? How do you go from one to the other? Or, for that matter, what’s the difference? While the terms pedantic and socratic arise most often in discussions about teaching methodologies, they also play a pivotal role when exploring sales methodologies. Salespeople can be…
Read MoreNon-Monetary Motivators
Contrary to popular belief, salespeople are not motivated by money alone. Researchers have demonstrated that three other factors strongly contribute to a salesperson’s motivation. These are Job Security, Task Autonomy, and Perception of Valued Contributor. Job Security To fully perform, salespeople need to believe their job is secure. They won’t be motivated to develop their…
Read MoreMotivating through Monetary Incentives
Perhaps the most examined structural motivation tool is the incentive structure of the compensation package. Managers have tinkered with this issue more than any other. Researchers have demonstrated links between incentives and performance more clearly than any other structural tool. A plethora of theory and data supports the impetus to tinker and research the compensation…
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