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Episode #498: Expanding Your Pricing Paradigm
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SHOW SUMMARY: Ron and Ed return to their roots and will be talking all things pricing this week including trends in subscription pricing as well as rethinking some previously discussed topics.
SHOW NOTES
Segment one
Congratulations to @WoodardCompany for the new sponsorship agreement with The Soul of Enterprise! We are JUST getting started and looking forward to the work together. Check them out at https://www.woodard.com/
Ever since Ron wrote Time’s Up people have been asking him, “Can you use the subscription business model in a CPA firm that offers audit services?” From the AICPA, “are code doesn't address Billings. Certainly nothing that prohibits a periodic billing for both attest and non-attest services”
Our show today is mostly focused on an article in HBR by Rafi Mohammed called, “Expand Your Pricing Paradigm” https://hbr.org/2023/01/expand-your-pricing-paradigm
From the article, 36% of new Allstate auto insurance customers now choose the Drivewise or Milewise pricing options https://hbr.org/2023/01/expand-your-pricing-paradigm
Segment two
“KFC Has An All-You-Can-Eat Buffet In Canada & There's Only One In The Whole Country” https://www.narcity.com/all-you-can-eat-kfc-exists-in-a-small-canadian-town
Ron today on the show: “Some resorts sell daytime access to pools and fitness facilities, even if you're not staying there. That's clever.”
When it comes to different pricing models, Tien Zhou’s point is important: It costs nothing to test this
Today I learned: If you send a New York Times article to someone, they get to read it for free. And so do you!
Segment three
On pricing models: Ed understands the “buy now, pay later” pricing model but definitely prefers the layaway. We will put it to the side for you and you can have it when you pay it off.
“Hopper, the fintech travel company, has a Price Freeze product that guarantees the price of an airline fare, a car rental, or a hotel room for a fixed time.” https://hbr.org/2023/01/expand-your-pricing-paradigm
Price break opportunities are a key section of the article we talked about today. Volume discounts, progressive pricing, and mixed bundling are all examples https://hbr.org/2023/01/expand-your-pricing-paradigm
Did you know that Big Gulp soft drinks at 7-Eleven can account for up to 10% of sales at stores??? https://hbr.org/2023/01/expand-your-pricing-paradigm
The highest price paid for Warren Buffet’s charity lunch auction pre-Covid was $4.57 million. When Buffett announced that 2022 would be the last lunch he’d offer, the auction garnered $19 million! https://hbr.org/2023/01/expand-your-pricing-paradigm
Segment four
In Denver? Interested in joining Ron and Ed at a conference? If you are attending the AICPA Digital CPA conference this year use the code DCPA100 for a $100 preferred discount! https://www.cpa.com/digital-cpa
In the article, there is a section called “Use Pricing to Enhance Business Efficiency”. What we think he really means is “using pricing to change customer behavior” https://hbr.org/2023/01/expand-your-pricing-paradigm
“Mammoth Holdings, which owns multiple car-washing businesses, reports that more than 60% of its revenue comes from customers who pay a monthly fee for unlimited washes” https://hbr.org/2023/01/expand-your-pricing-paradigm
From Ron at the end of the show today, “How different is your pricing structure — I’m not talking about the price level — the pricing structure from your competition? This is another incredible source of competitive differentiation.”
Bonus Content is Available As Well
Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.
Click the “FANATIC” image to learn more about pricing and member benefits.
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