{"id":955,"date":"2013-07-29T14:32:03","date_gmt":"2013-07-29T21:32:03","guid":{"rendered":"http:\/\/www.artsjournal.com\/worth\/?p=955"},"modified":"2013-07-29T14:32:03","modified_gmt":"2013-07-29T21:32:03","slug":"taking-pricing-seriously","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2013\/07\/taking-pricing-seriously\/","title":{"rendered":"Taking pricing seriously"},"content":{"rendered":"

\"crossroads\"<\/a>Many posts in this blog have been about how arts organizations, especially in the nonprofit or public sectors, can learn a thing or two about strategic pricing from other organizations, including non-arts commercial firms. But at The Economist<\/em>, blogger Schumpeter<\/a> writes that the private sector is not all that sharp when it comes to pricing either:<\/p>\n

Firms should simply take pricing more seriously: have a clear policy and make everyone stick to it. Obvious? At a recent conference organised by Simon-Kucher, the 100 or so delegates were asked to put their hands up if their company had a written pricing policy. Just two did so. Setting prices, promotions and discounts is often left to junior people and local sales offices. Even where a policy is set from the top, the salespeople may ignore it because they are still being rewarded for maximising sales and keeping customers. Neil Hampson, a pricing expert at PWC, says he sometimes starts his client meetings by asking: \u201cWhen was the last time you congratulated a salesman for walking away from a client?\u201d Most have never done so.<\/p><\/blockquote>\n

It’s not so hard to cut prices in order to increase sales, and that will positively impact ‘market share,’ but to what end? Strategic pricing involves knowing when a general price cut is not<\/em> good strategy, when it will lead to a fall in net revenues.<\/p>\n

This was striking:<\/p>\n

Equipment-makers who sell to other businesses can be especially prone to a \u201ccost-plus\u201d mentality, in which they charge the same margin to everyone instead of identifying those that are less price-sensitive and finding ways to earn more from them.<\/p><\/blockquote>\n

There is nothing strategic about setting prices by adding some fixed percentage to costs. Smart pricing is all about knowing your potential audience, whether there are groups more or less price sensitive to what you offer, the degree to which there are different demands for different levels of quality, or quantity, which consumers are interested in package deals, and so on.<\/p>\n

So don’t assume the private sector always knows what it’s doing when it comes to pricing.<\/p>\n","protected":false},"excerpt":{"rendered":"

Many posts in this blog have been about how arts organizations, especially in the nonprofit or public sectors, can learn a thing or two about strategic pricing from other organizations, including non-arts commercial firms. But at The Economist, blogger Schumpeter writes that the private sector is not all that sharp when it comes to pricing […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[26],"tags":[],"class_list":{"0":"post-955","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-issues","7":"entry","8":"has-post-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-fp","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1885,"url":"https:\/\/www.artsjournal.com\/worth\/2015\/04\/are-nonprofit-arts-organizations-special\/","url_meta":{"origin":955,"position":0},"title":"Are nonprofit arts organizations special?","author":"Michael Rushton","date":"April 16, 2015","format":false,"excerpt":"April 16, 2015 marked the opening session of a conference held at the School of Public and Environmental Affairs at Indiana University Bloomington, on Advancing the Field(s) of Nonprofit Management: New Structures, New Solutions. I was asked to speak about the arts, specifically about relationships between nonprofit arts organizations and\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"Blood alone moves the wheels of history!","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2015\/04\/my-speech.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":377,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/02\/targets-the-cost-of-bread-and-nonprofit-arts-pricing\/","url_meta":{"origin":955,"position":1},"title":"Targets, The Cost of Bread, and Nonprofit Arts Pricing","author":"Michael Rushton","date":"February 25, 2013","format":false,"excerpt":"My previous post drew lessons for museum pricing from what we observe in the prices set by cable television providers. But how can for-profit pricing be relevant to nonprofit museums, to orchestras and opera? Don\u2019t the nonprofit arts, unlike cable companies, have a mission to be accessible to all patrons,\u2026","rel":"","context":"With 5 comments","block_context":{"text":"With 5 comments","link":"https:\/\/www.artsjournal.com\/worth\/2013\/02\/targets-the-cost-of-bread-and-nonprofit-arts-pricing\/#comments"},"img":{"alt_text":"Focus on the target","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/02\/archersDM1304_468x364-300x233.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1976,"url":"https:\/\/www.artsjournal.com\/worth\/2016\/02\/dynamic-pricing-and-price-discrimination-are-not-the-same-thing\/","url_meta":{"origin":955,"position":2},"title":"Dynamic pricing and price discrimination are not the same thing","author":"Michael Rushton","date":"February 6, 2016","format":false,"excerpt":"But a recent article in The Economist (!) confuses the matter. Dynamic pricing occurs when sellers adjust prices on a frequent basis to account for varying shifts in demand, or limitations in supply. Uber raises fares when demand spikes upward and drivers are scarce; sports teams cut prices for tickets\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"let's get this straight","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2016\/02\/apples-and-oranges.jpeg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":387,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/02\/why-is-dynamic-pricing-so-rarely-used\/","url_meta":{"origin":955,"position":3},"title":"Why Is Dynamic Pricing So Rarely Used?","author":"Michael Rushton","date":"February 28, 2013","format":false,"excerpt":"As technology has come available that allows performing arts organizations to adjust prices in light of demand, the question has arisen: is it appropriate for nonprofit theaters to employ dynamic pricing? See here and here for example. Let's consider the issue from a different angle: why is dynamic pricing so\u2026","rel":"","context":"In \"dynamic pricing\"","block_context":{"text":"dynamic pricing","link":"https:\/\/www.artsjournal.com\/worth\/tag\/dynamic-pricing\/"},"img":{"alt_text":"one price","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/02\/220px-Vitascope_Theater_Buffalo_Nov_1897_ad-177x300.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1425,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/07\/strategic-pricing-for-the-arts\/","url_meta":{"origin":955,"position":4},"title":"Strategic pricing for the arts","author":"Michael Rushton","date":"July 21, 2014","format":false,"excerpt":"I'm pleased to say my book on pricing in the arts has been released - Amazon link here, and Routledge link (including for ordering e-inspection copies) here. What's it all about? As I do \u00a0on this blog, I have tried to give arts managers, and students of arts management, a\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"for what it's worth","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/07\/my-book.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1106,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/03\/when-dynamic-pricing-makes-sense\/","url_meta":{"origin":955,"position":5},"title":"When dynamic pricing makes sense","author":"Michael Rushton","date":"March 11, 2014","format":false,"excerpt":"\"Let's move before the raise the parking rate.\" Palmerston North, New Zealand, has the latest in dynamic pricing for parking. From Offsetting Behavior (via Marginal Revolution): The 33-space carpark in the city\u2019s Church Street has been kitted out with solar-powered sensors by local parking technology firm Frogparking that can tell\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"use this fern for $2 an hour","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/03\/kiwi.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/955","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/comments?post=955"}],"version-history":[{"count":0,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/955\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media?parent=955"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/categories?post=955"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/tags?post=955"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}