Smart ideas about pricing from Trish Gorman
My good friend and colleague, and Dean of the Jack Welch Management Institute, Trish Clifford, had a very thought provoking post over at her Forbes blog on where Netflix went wrong in its latest strategy kerfuffle, particularly with respect to pricing.
She makes the point that one can either price cost-plus, price to market or price to value. One of the biggest challenges I see with growth businesses, in particular, is figuring out what that value really is and pricing accordingly. As Trish points out, Netflix committed some cardinal sins in this regard, particularly surprising its customers with a steep price increase and confusing them with an on again off again strategy to abandon DVD's by mail and switch to streaming. Worth a read!
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