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In this episode of the Duct Tape Marketing Podcast, I interviewed Caroline Crewe, an expert on pricing strategies for businesses. Crewe's extensive background includes earning an MBA, completing pricing courses at MIT, and nearly a decade of hands-on experience in the field. Her journey into pricing expertise began with her own business challenges, leading her to understand that pricing is a crucial lever for boosting revenue. In this episode, we uncover the common pricing mistakes businesses make and how to develop confidence in your pricing to stop undercutting competitors and start profiting.
Key Takeaways
With years of experience in pricing strategy, Caroline Crewe shares her insights into overcoming common pricing obstacles. She emphasizes the importance of not blindly copying competitors' prices, as this can lead to underpricing and lost revenue. Crewe points out that many businesses fall into the trap of a one-size-fits-all pricing approach, which fails to capture the varying willingness to pay and perceived value among different customers.
One of the critical strategies discussed is moving away from cost-plus pricing, which focuses on covering costs plus a desired profit margin. Crewe argues that this approach limits profitability and does not align with customer perceptions of value. Instead, she advocates for value-based pricing, which considers the benefits and outcomes the customer receives.
By implementing these strategies, businesses can gain the confidence to set prices that reflect their true value, avoid the pitfalls of undercutting, and achieve greater profitability.
