strategy

Pricing Strategies
Pricing Strategies Jonathan Poland

Pricing strategy involves deciding on the right prices for a company’s products or services in order to achieve specific business goals. This can include objectives such as maximizing revenue, penetrating a particular market, positioning a product or brand in a certain way, managing inventory, and competing with other businesses. In order to develop an effective pricing strategy, companies must consider a range of factors, such as the cost of production, market demand, competition, and the value that customers place on the product or service. By carefully structuring and setting prices, businesses can maximize their profits and achieve their desired objectives.

The following are common pricing strategies.

  • Algorithmic Pricing
  • Channel Pricing
  • Decoy Effect
  • Dynamic Pricing
  • Everyday Low Price
  • High-Low Pricing
  • Loss Leader
  • Market Price
  • Penetration Pricing
  • Predatory Pricing
  • Premium Pricing
  • Price Discrimination
  • Price Leadership
  • Price Points
  • Price Signal
  • Price Skimming
  • Price Umbrella
  • Price War
  • Pricing Objectives
  • Subscription Model
  • Value Pricing
  • Variable Pricing

Over Planning
Over Planning Jonathan Poland

Over planning refers to the practice of spending excessive amounts of time planning without implementing any of the plans. This can be a wasteful and inefficient approach to problem-solving, as it can lead to plans that are overly complex and difficult to execute.

In some cases, over planning may be necessary for the development of extremely complex products or projects, such as a new airliner. In these situations, a high level of planning is required in order to ensure that the project is completed successfully. However, for most business operations, over planning can be a hindrance rather than a help.

Instead of over planning, it is often more effective to develop a clear and concise plan that focuses on the key objectives and priorities. This can help to ensure that resources are used efficiently and that progress is made in a timely manner. By avoiding over planning, businesses can avoid wasting time and effort on unnecessary activities, and instead focus on implementing their plans and achieving their goals. The following are alternatives that allow for less planning overhead, reduced project risk and a faster response to change.

Last Responsible Moment

Last responsible moment is the practice of delaying decisions and planning until they absolutely need to be done. This allows you to respond to change and reduce wasted planning effort.

Integrated Product Team

Small multidisciplinary teams that are responsible for requirements, development and operations for a single product or process. This prevents the heavy politics of having departments dealing with departments. It also simulates the structure of small firms that tend to do things far more efficiently than larger firms.

Ranking Priorities

A common way that projects get big is that stakeholders are asked to prioritize their requirements and they rate everything as “must have.” This can be prevented with a mandate that they rank priorities from 1…n.

Agile

Agile is the practice of implementing work in chunks no longer than a few weeks in duration. This typically restricts the planning phase for a release to a single day. Agile also allows for longer term planning to occur in the background away from the critical path of releasing work often.

Time to Market

Prioritizing time to market as a business metric forces planning cycles to be short as changes need to be shipped quickly. In other words, executives that aggressively evaluate teams on time to market will force teams to minimize planning.

Continuous Improvement

Continuous improvement is the process of measuring results, improving and measuring again. This works well with agile whereby you improve in quick releases that can be adapted quickly based on real world results.

Process Streamlining

Minimizing bureaucratic processes that make planning bigger such as budget approvals or reviews by multiple departments. It is easier to justify minimal processes for small changes. This is yet another benefit of agile.

Planning Culture

Implementing habits, routines and norms that shorten planning such as standing meetings where nobody gets to sit down.

Structural Minimization

The less people that are involved in a change the less planning will be required. Likewise, changes that involve vendors or multiple departments may be orders of magnitude slower. As such, a basic principle of planning reduction is to put everyone with the authority to complete the change on the same small team. This can be described as designing your organizational structure to minimize the footprint of change.

Media Infrastructure
Media Infrastructure Jonathan Poland

Media infrastructure refers to the technologies, services, facilities, and outlets that are essential for the communication of information, opinions, and expressions. These include things like telecommunication networks, broadcast facilities, and printing presses, as well as the various media outlets that make use of these technologies, such as newspapers, television stations, and social media platforms. The media infrastructure plays a critical role in enabling the free flow of information and ideas, and is essential for the functioning of modern societies. By understanding the media infrastructure, we can gain insight into the ways in which information is disseminated and consumed, and can work to ensure that these technologies and outlets are used in responsible and ethical ways. The following are common examples.

Networks
Data and communication networks such as the internet or 5G mobile networks.

Last Mile
Last mile is the infrastructure required to deliver media to the consumer’s door such as an internet connection, newspaper delivery or cable TV service.

IT Platforms
Generally speaking, digital media runs on a variety of IT platforms such as a cloud infrastructure service or a content management platform.

Facilities
IT and media related facilities such as a data center, broadcasting center, newsroom or modern printing press.

Game Platforms
Platforms for creating games and other virtual or mixed reality media.

Applications
Software that is used by end-users such as mobile apps for news, streaming media or games.

Broadcast Media
Media that flows from a single source to a large audience such as television networks, newspapers and radio stations.

Social Media
Platforms that allow anyone to publish media to the world such as a video sharing website and app.

Search & Discovery
Tools of media discovery such as a search engine or content aggregation service.

Streaming Media
Services that provide media on-demand to mobile and home devices.

Production Tools
Tools of media production such as a video editing platform.

Studios
Organizations and facilities that produce film, television, music, games and other media.

Distribution
Facilities and services that distribute media such as a movie theatre.

Event Infrastructure
Infrastructure that is used to produce and deliver media events such as a concert or conference that communicates to large audiences. For example, a concert hall.

Media Analysis
Media Analysis Jonathan Poland

Media analysis is the study of the structure, content, and methods of communication in various forms of media. This involves examining the various media outlets, such as newspapers, television, and social media, as well as the specific communication artifacts and structures used within each outlet. The goal of media analysis is to gain a better understanding of the ways in which information is presented and disseminated through these channels, and to identify any potential biases or inaccuracies in the media coverage. By conducting a systematic investigation of these communication structures and methods, one can gain insight into the ways in which the media presents information and can use this information to improve the accuracy and fairness of the media coverage.

Content Analysis
Content analysis is the systematic evaluation of the content of messages that are shared in media. For example, considering the methods that media use to influence or spread propaganda such as message framing, nudges and call to action.

Media Planning
Media analysis often has practical goals such as identifying channels that can be used to reach a target audience with a promotional message.

Media Economics
Evaluating value creation, competition and markets in the media industry. For example, attention economics that models the value of reaching an audience with a message.

Structural Analysis
Examining the structure of media control. For example, investigating the ownership structure of newspapers in the United States to identify entities that have the power to influence society at scale.

Behavioral Analysis
Evaluating the impact of media on behavior. For example, compulsive behaviors such as checking social media every few minutes that interferes with an individual’s ability to be a happy and productive member of society.

Social Analysis
Evaluating the impact of media on politics, corporate strategy, design, culture, economics, communities and quality of life.

Medium is The Message
Medium is the message is the idea that each medium shapes the content and character of communication. This calls for a big picture analysis that considers how a new medium transforms a society. For example, the emergence of internet media that allows anyone to broadcast to large audiences changed the nature of communication on a global basis.

Price Promotion Strategy
Price Promotion Strategy Jonathan Poland

A price promotion is a marketing strategy that involves temporarily lowering the price of a product or service in order to increase sales and stimulate consumer demand. This type of promotion can be an effective way for businesses to drive traffic to their stores, increase sales, and gain market share.

There are several different types of price promotions, including temporary price reductions, discounts, coupons, and rebates. These promotions can be targeted at specific groups of consumers, such as loyal customers or new customers, and can be offered through a variety of channels, such as in-store, online, or through email marketing campaigns.

One of the key benefits of using price promotions is that they can help businesses to attract new customers and increase sales in the short term. By offering temporary discounts or other incentives, businesses can entice consumers to purchase their products or services, which can help to boost revenue and drive growth.

In addition to attracting new customers, price promotions can also help businesses to retain existing customers and build loyalty. By offering special discounts or other incentives, businesses can show their appreciation for their customers and encourage them to continue shopping with them in the future.

However, it is important for businesses to carefully consider their price promotion strategy in order to maximize the benefits and minimize any potential drawbacks. For example, businesses should consider the potential impact on their profit margins, as well as the potential for damaging their brand image if they are perceived as constantly offering discounts or promotions.

Bottom line, price promotions can be an effective way for businesses to drive traffic, increase sales, and build customer loyalty. By carefully planning and executing their price promotion strategy, businesses can capitalize on the benefits of these promotions while minimizing any potential drawbacks. Here are some examples.

Price Discrimination

Price discrimination is a pricing strategy that charges price insensitive customers more and price sensitive customers less. For example, price sensitive customers may be willing to collect coupons to get a discount. Price insensitive customers are far less likely to use coupons unless they are easy to find and use.

Customer Acquisition

Discount offers that are only available to new customers. For example, an internet provider that offers to pay the cancellation fees charged by a competitor.

Impulse Purchases

Sales designed to create impulsive purchases. For example, an ecommerce site that has a 12 hour deal with a timer that counts down.

Behavior Reinforcement

Sales that encourage habitual purchases such as a sale every Tuesday at a hardware store that encourages customers to visit weekly.

Customer Visits

Sales that are designed to get customers to visit such as a loss leader whereby you offer a single product at an unprofitable price to attract customers.

Tit for Tat

In some cases, a sale isn’t aimed at customers but at competitors. For example, quickly matching any sales by your competitors as a tit for tat response designed to prevent them from starting a price war.

Market Share

Sales designed to increase your market share whereby they are a long term strategy that may decrease short term profitability. For example, a night club that’s relatively unpopular that offers cheap beverages to grow its customer base.

Loyalty Breaking

A sale price designed to get the loyal customers of your competitor to try your product. For example, a cola that seeks to grab brand loyal customers from a competitor with a sale price of 50 cents a bottle where the competitor is charging $1.99.

Loyalty Reinforcing

A sale that leverages your base of loyal customers or that seeks to reinforce their purchasing behavior. For example, coupons mailed only to loyal customers.

Target Market

A sale aimed at a particular target market such as a seniors discount day.

Psychological Discounting

Sale prices and discount rates that are perceived positively. For example, sale prices that feel honest and low such as $9 as opposed to $8.99.

Revenue Management

Revenue management is the process of optimizing prices for inventory that expires at a point in time such as a seat on a flight or night in a hotel room. This calls for complex strategies that are responsive to inventory levels. For example, a flight that is expensive four months before departure that is steeply discounted if seats don’t begin to fill a month before departure.

Inventory Clearance

Sales aimed at preventing inventory problems or clearing inventory. For example, a seasonal sale in the middle of a season designed to clear inventory before it becomes out-of-season.

Practical Thinking
Practical Thinking Jonathan Poland

Practical thinking is a type of thinking that focuses on finding timely and reasonable solutions to problems. This type of thinking is characterized by a focus on the real-world consequences of different actions and decisions, and on finding solutions that are feasible and effective in the short-term. In contrast, other types of thinking may be overly complex, slow, inflexible, or focused on theoretical or ideological considerations, rather than on practical concerns.

Practical thinking is an important skill in a wide range of fields, including business, engineering, and public policy. In business, for example, practical thinking can help managers and leaders make effective decisions that are grounded in reality and that take into account the needs and constraints of their organizations. In engineering, practical thinking can help designers and developers create solutions that are both technically sound and feasible to implement. And in public policy, practical thinking can help policymakers identify and implement solutions to complex social and economic problems.

To develop practical thinking skills, it can be helpful to approach problems with a focus on the concrete and specific, rather than on abstract or theoretical considerations. This can involve asking questions about the real-world implications of different actions, and about the feasibility and effectiveness of potential solutions. It can also involve seeking feedback and input from others who have relevant expertise or experience. By engaging in this type of thinking, individuals can improve their ability to identify and implement practical solutions to a wide range of problems.

Here are a few examples of how practical thinking might be used in a business environment:

  1. A company is struggling to meet its sales targets. Rather than implementing a complex and time-consuming new sales strategy, a practical thinker might identify small, actionable steps that the company can take to improve its sales performance, such as offering promotions or training its sales team on new techniques.
  2. A business is facing increased competition from new, innovative products. A practical thinker might identify ways that the business can adapt to these changes and maintain its competitive advantage, such as by developing new features or services that meet changing customer needs.
  3. A company is looking to expand into a new market. Rather than conducting a lengthy and expensive market research study, a practical thinker might identify smaller, more targeted ways of gathering information about the new market, such as by talking to customers or industry experts, or by analyzing competitors’ products and pricing.

Post Sales
Post Sales Jonathan Poland

After a sale is made, post-sales processes kick in to fulfill the customer’s expectations and strengthen the relationship. This can include a range of activities, such as delivering the product or service, following up with the customer to ensure their satisfaction, and implementing marketing and sales strategies to retain the customer and potentially upsell in the future. Post-sales efforts are crucial for maintaining a positive reputation and fostering long-term customer loyalty.

Order Fulfillment
Delivering products and/or activating services. In many cases, a salesperson acts as a single point of contact for order delivery.

Billing & Collections
Billing the customer for orders and collecting revenue.

Cancellation & Changes
The process of configuring, changing or canceling an order. In many cases, a customer has a right to cancel an order for a period of time after a sale is completed. This is a delicate time that requires careful relationship management.

Returns
Processing return requests and the reverse logistics required to accept a return.

Complaints
Handling customer complaints including feedback that flows to you and posts to review sites and social media. For example, a fashion company that offers to replace a shirt for free with a different size when a customer complains in a review that the shirt doesn’t fit. The customer will then be likely to update their review to indicate they received a more satisfactory item.

Support
Providing support to help the customer get the most out of their purchase. This may include a number a customer can call and a website that provides information and tools.

Service Delivery
The day-do-day process of delivering a service. For example, the process of providing a software platform for customers.

Incident Management
Incident management is a component of service delivery that involves investigating and resolving issues with a service. It is common for salespeople to be involved in this process for high value accounts. For example, a business customer that is playing a million dollars a month to a telecom provider will expect their sales representative to be on top of any problems with the service.

Relationship Management
The general process of building and sustaining the relationship with the customer. For example, a salesperson who calls a customer to offer them tickets to an industry conference to build out a relationship.

Upselling & Cross Selling
The ongoing process of convincing a customer to upgrade or make new purchases.

Customer Referrals
Encouraging satisfied customers to refer business to you such as parent companies, sister companies, partners, friends and family.

Maintenance & Supplies
The delivery of maintenance services and supplies.

End-of-life
Helping a customer deal with the end-of-support and end-of-life of products and services.

Customer Needs Anlaysis
Customer Needs Anlaysis Jonathan Poland

Customer needs analysis is the process of identifying and understanding the needs and wants of customers in order to develop products and services that effectively address them. By engaging with customers and gaining a deep understanding of their requirements, companies can create products and services that are tailored to meet their needs and increase the chances of success in the market. This process is often the first step in product development or sales, as it provides a foundation for companies to build upon and ensure that they are meeting the needs of their target audience.

Business Needs Analysis
Analysis of business needs such as a firm that needs to increase the efficiency of a production line.

User Needs Analysis
Discovering the needs of end-users. For example, users that require an easy to use screen to complete a common task that they perform hundreds of times a week.

Pain Points
A needs analysis may build requirements from the ground up. However, it is common to start with pain points with the current situation. For example, a software salesperson might start with the problems a firm is experiencing their current software and business processes.

Goals & Objectives
Listing out the goals and objectives of an organization related to the analysis. For example, a firm might be purchasing solar panels to reduce costs or to reduce their impact on the environment.

Use Cases
Use cases and similar techniques such as user stories that document requirements from the user perspective.

Edge Cases
Identify customer use cases at the extremes of possibilities. For example, a customer usually processes 1 million transactions a day but on rare occasions has processed as many as 44 million. Edge cases are a common source of unique selling propositions.

Functions
Listing out the things that the customer wants to accomplish.

Expectations
Discovering basic expectations that the customer assumes are always included in a product or service. For example, a customer may feel its obvious that sales software serves as a customer database. Such unstated assumptions can lead to customer rejection of products and services as they are generally unhappy when an expectation isn’t met.

Perceptions
Capturing perceptions of products, services and experiences. For example, a customer who perceives chemical ingredients in food products as unhealthy or unattractive.

Quality
Listing the things that define quality in the eyes of the customer.

Reverse Quality
Things that are commonly added to products, services or experiences that customers don’t want. For example, a navigation system that displays a legal disclaimer every time you use it.

Unstated Needs
If you ask customers to list their needs, they often miss standard functions, obvious needs and popular features. As such, it is helpful to use a list of common needs in the problem space to validate against. For example, a software salesperson might have a list of the 100 most commonly demanded functions and features that they reference throughout needs analysis with a customer. If you point to something that the customer misses they will often agree it is an important requirement.

Conflicting Needs
Different representatives of the customer may list needs that are seemingly contradictory. For example, one representative of the customer may require that a solar system fit in a small area while another may require that it have 100 megawatt of capacity. Needs analysis doesn’t tackle inconsistencies and leaves them intact. Inconsistencies are often useful in design or in structuring customer choices.

Secret Needs
Needs that customers don’t want to talk about but need nonetheless. If a business is purchasing software, employees will typically state needs related to business functions. However, they may secretly evaluate software according to the likelihood its implementation will cause them extra overtime work.

Delight Needs
Most customer needs are basic expectations that don’t impress the customer much when they are met. Delight needs are the small set of needs that customers can get excited about such that they significantly influence the customer. A customer purchasing a house may be relatively unexcited about architecture, interiors and equipment but delighted at the prospect of living in an area that’s considered posh.

Pre-Sales
Pre-Sales Jonathan Poland

The term “pre-sales” can refer to a range of different things depending on the industry in which it is used. In some cases, it might refer to business processes or organizational structures that are focused on preparing for and supporting the sales process. In other industries, it might refer to specific product testing techniques or direct sales methods that are used to generate leads and engage potential customers. Overall, the term pre-sales typically refers to activities or practices that are focused on supporting and advancing the sales process, whether that involves preparing for sales meetings, conducting product demos, or developing marketing materials.

Here are a few examples of what the term “pre-sales” might refer to in different industries:

  1. In the software industry, pre-sales might refer to activities such as conducting product demonstrations, preparing proposal documents, and providing technical support to sales teams as they engage with potential customers.
  2. In the automotive industry, pre-sales might refer to the process of testing and evaluating new vehicles before they are released to the market. This could include activities such as road testing, crash testing, and conducting durability and reliability tests.
  3. In the real estate industry, pre-sales might refer to the process of marketing and selling new development projects before they are completed. This could include activities such as conducting market research, developing marketing materials, and hosting sales events to attract potential buyers.
  4. In the retail industry, pre-sales might refer to the process of promoting and selling products before they are available for purchase. This could include activities such as pre-order campaigns, limited-time offers, and special promotions for early adopters.

Switching Barriers Jonathan Poland

Switching Barriers

Switching barriers are factors that make it difficult or inconvenient for customers to switch from one product or service to…

Customer Needs Anlaysis Jonathan Poland

Customer Needs Anlaysis

Customer needs analysis is the process of identifying and understanding the needs and wants of customers in order to develop…

Business Scale Jonathan Poland

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Product Quality Jonathan Poland

Product Quality

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Environmental Challenges Jonathan Poland

Environmental Challenges

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Collectables Jonathan Poland

Collectables

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Change Resistance Jonathan Poland

Change Resistance

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Decision Trees Jonathan Poland

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Decision Trees are a popular machine learning algorithm used for both classification and regression tasks. They are part of a…

Supplier Risk Jonathan Poland

Supplier Risk

Supplier risk refers to the risk that a supplier will not fulfill their commitments to an organization, which could result…

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