For new businesses or new product launch, it's not about technique, it's pricing based on preferred Platinum customer, costs, and company positioning. Here are best and worst practices and examples that are not all that obvious. If that weren't enough, you have to do it legally by knowing the laws.

1. With Jan Triplett, Ph.D. CEO, Business Success Center © 2011 Austin, TX Best Practices in Pricing for New Businesses & Products © Business Success Center, Austin, TX 2011 1

3. Providing guided growth strategy & advice to achieve success since 1982

4. Sales, marketing, & financial management focus

5. Clients from A-Z industries, high tech to no tech, products & services

6. Top 20 Management Consulting Firm (ABJ Book of Lists); national & international recognition2

7. Your Company Focus? B to B? B to C? Better to be P to P .)(. (Belly Button to Belly Button) © Business Success Center, Austin, TX 2011 3

8. Your Price is NEVER Right for Everyone It’s all about: Getting the right customer Keeping the right customer Considering their perceived risk Knowing your true total costs Identifying the top value you bring Accounting for long & short term goals Know the laws THEN you can price right & legally! © Business Success Center, Austin, TX 2011 4

9. Your Biggest Concern about Pricing What keeps you up at night? Losing too many customers. Not being competitively priced. Leaving money on the table. Not being profitable enough on each sale. Afraid I am not accounting for all my costs (missing something). Breaking the law with my pricing policies. None of the above. © Business Success Center, Austin, TX 2010 5

11. Easiest Sale© Business Success Center, Austin, TX 2011 6 What’s Your Pricing Goal?Match the goal.

12. What Customer Do You Want?Set Your Prices Based on Them. Platinum & Gold — create stabilitySilver —has potentialBronze — uncertainLead — a time waster Concrete — a business killer & never satisfied Radio Active Waste a long-lasting reputation & confidence destroyer © Business Success Center, Austin, TX 2011 7

13. Platinum customers are… • Visionaries See problem as you do See value of your solution • Adventurous Confident in you Trust you • Decisive Hassle-free or less hassle © Business Success Center, Austin, TX 2011 8

14. A “Fair” Price Dilemma: What’s fair to one; may not be fair to the other. Customers want: To get good value, pay a fair price. Sellers want: To give good value, get a fair price. © Business Success Center, Austin, TX 2011 9

15. What You Need to Know about Pricing Pricing should be… Pricing will… © Business Success Center, Austin, TX 2011 10 An attention getter and qualifier. A way to position your company. Perceived by your Platinum-preferred client as a benefit not just a feature. Make you rich or at least comfortable or just sick and tired. Affect the success of all areas of the business. Require that you don’t just set it & forget it.

16. The Big Pricing Policy Debate Cost Vs. Value © Business Success Center, Austin, TX 2011 11

17. What Do Your Customers Want? • More than a solution or something fixed. There are 6 Situational Outcomes™ they value. (More at ownersview.com: http://bit.ly/gtdaVP) There are 5 personal risks they are willing to take to get what they value at the price charged: Social, Psychological, Functional, Physical, Financial • Set your prices based on your ability to deliver that outcome and reduce their risk. © Business Success Center, Austin, TX 2010 12

19. Stock up

20. Repeat buy

21. What else?© Business Success Center, Austin, TX 2011 13

22. Pricing Considerations © Business Success Center, Austin, TX 2011 14 Pricing is an emotional issue for you, your employees, & customers. Buyer reaction to price is unpredictable. Shoot from the hip & you’ll end up shot in the foot or worse. One price strategy usually doesn’t fit all products/services. Controlling costs can make a business more profitable than raising the price. Stay alert: pricing laws & regulations change.

23. A Quick Word About Laws © Business Success Center, Austin, TX 2010 15 Two key laws to be familiar with: DTPA (Deceptive Trade Practices Act) — illegal to “bait & switch” or any of the many other ways that are used to mislead customers. Applicable to sales to businesses and consumers.http://www.statutes.legis.state.tx.us/SOTWDocs/BC/htm/BC.17.htm Clayton Act (Robinson-Patman Act Amendment) — illegal to discriminate on price (except in some instances), tie or bundle purchasing contracts.

24. Best Practices in Pricing • Price what you’re worth. • Use KISS pricing system. • Account for profit, contingency & hassle-factor. • Price for positioning. • Monitor & adjust. © Business Success Center, Austin, TX 2011 16

25. Worst Practices in Pricing • Undervaluing your benefits. • Under-estimating costs. • Not considering your Platinum customer’s “Flinch Point”. • Blindly following competition. • Inconsistent pricing. • Violating laws - DTPA © Business Success Center, Austin, TX 2011 17

26. Good & Bad Pricing Examples Charging $15 per hr for professional services Providing a $400 discount on a product Charging $500 for one research report Charging a low price when you get started Your examples? The answer is not completely obvious for any of these. © Business Success Center, Austin, TX 2011 18

27. Pricing Practices Action Items Make sure you have accounted for your true total costs. Know the value of what you sell. Ensure your pricing reflects your preferred customers value outcome, your preferred positioning, meets legal requirements, includes profit and contingency as well as costs. © Business Success Center, Austin, TX 2010 19 For a copy of BSC’s Pricing Terms & Concepts Glossary or additional questions or to meet about your pricing issues, please email me at triplett@runitright.biz.

28. Here’s to your success! Business Success Center Sales & Financial Management Services Jan Triplett triplett@runitright.biz Jan Triplett Blog: http://www.ownersview.com February 11, 2011 © Business Success Center, Austin, TX 2011