Episode #499: Pricing Puzzles and Pitfalls

Business Podcast Archive and Shows - The Soul of Enterprise

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SHOW SUMMARY: Join Ed and Ron as they delve into the complexities of modern pricing strategies and their impacts on consumers and brands. We’ll explore the supposed frustration consumers face with the rise of add-on fees and personalized pricing. From airline baggage fees to layered subscription costs, hidden charges make it increasingly difficult for buyers to navigate the marketplace without feeling nickel and dimed. Also, is price-led profit growth coming to an end? Is inflation and recession fear signaling a shift away from growing margins from more sophisticated pricing? Finally, are luxury brands underpricing? Despite their premium positioning, some luxury brands might not be charging enough to reflect their true value and maintain their exclusivity. We’ll discuss the 4Es of pricing high-end brands, and how we can apply that framework to professional firms. Join us as we unravel these topics and discuss how consumers and businesses can navigate the complex world of modern pricing.

SHOW NOTES

Segment one

• At the start of the show, Ron and Ed discussed “The era of price-led profit growth is coming to an end” https://www.marketingweek.com/ritson-price-led-profit-growth/

• “Marketers know customers and how to communicate to them, and the finance department does it doesn’t” https://www.marketingweek.com/ritson-price-led-profit-growth/

• Wait….what? “Growth is still the imperative, but getting it from a brilliantly executed pricing [strategy] is surely coming to an end.” https://www.marketingweek.com/ritson-price-led-profit-growth/

• Correct. 100% “Most people I know don't even think about the price of what they're buying at McDonald’s.” —Ed Kless

• Arthur Laffer was asked once, “How many companies do you need in an industry in order for it to be competitive?” And he said, “One.”

Segment two

• Well, we disagree with almost everything in this article but that’s no reason not to discuss it and talk about the counter arguments: https://www.theatlantic.com/ideas/archive/2024/04/surge-pricing-fees-economy/678078/ @jcbeam

• “In a world of constantly shuffling prices, could predictability become a competitive advantage?” Yes, absolutely. https://www.theatlantic.com/ideas/archive/2024/04/surge-pricing-fees-economy/678078/

• “If one company refuses to switch to all-in pricing, it can undercut the rest.” That's also known as a marketing opportunity. https://www.theatlantic.com/ideas/archive/2024/04/surge-pricing-fees-economy/678078/

• Everything about this article resonated with Ron and Ed: “How Starbucks Devalued Its Own Brand” https://hbr.org/2024/06/how-starbucks-devalued-its-own-brand

• NSFW. You’ve been warned. “The kid from Brooklyn” talks about Starbucks https://www.dailymotion.com/video/xudxl

Segment three

• If you plan to go to the AICPA digital conference in Denver this year you can get a preferred price of $100 off If you type in the code DCPA100 upon checkout. Ed and Ron will BOTH be there. https://www.cpa.com/digital-cpa

• We have a preferred price for Ed’s upcoming event in Dallas with Hector Garcia. Use code FOE900 at this link: https://reframe.shoprocket.io/#!/2-day-event-in-dallas-tx-aug-5-6 @qbkaccounting

• What’s really wrong with the Starbucks customer experience today? Joe Pine nails it with, “Mobile ordering places you and your in-house order in an invisible queue of indeterminate and sometimes seemingly interminable length.” https://hbr.org/2024/06/how-starbucks-devalued-its-own-brand @joepine

• Regarding a coffee shop idea, “Throw in the coffee for free and it subsumes the the actual product into the experience.” —Ron Baker

Segment four

• In segment four, “Are luxury brands underpricing?” https://jingdaily.com/posts/opinion-are-brands-like-burberry-and-balenciaga-underpricing-themselves

• Editor’s note: I was taught the 4Ps of marketing in college and thought they were crap. How about “the 4E framework of: Emotion, Experience, Engagement, and Exclusivity.” https://jingdaily.com/posts/opinion-are-brands-like-burberry-and-balenciaga-underpricing-themselves

• Regarding engagement marketing, “When executed well, clients fall in love with a brand and as a result, are willing to invest in a relationship.” https://jingdaily.com/posts/opinion-are-brands-like-burberry-and-balenciaga-underpricing-themselves

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