The 1% Windfall: How Successful Companies Use Price to Profit and Grow
By: Rafi Mohammed
Published: March 2010
Format: Hardcover, 224pp
ISBN-13: 9780061684326
ISBN-10: 0061684325
Publisher: HarperCollins Publishers
"Since pricing is an underutilized strategy, it is fertile ground for new profits. Focusing on better pricing is a quick path to new profits and growth", writes pricing expert and Founder of Culture of Profit LLC, Rafi Mohammed in his revolutionary and pricing myth shattering book The 1% Windfall: How Successful Companies Use Price to Profit and Grow. The author describes how developing and implementing an effective pricing strategy, that moves far beyond traditional ideas for setting prices, will not only increase company profits but will also enhance business competitiveness even in a down economy.
Rafi Mohammed describes how even a 1% incremental price increase leads to almost immediate profit gains. A price change can be put in place one day, and can literally result in higher profits the very next day. Since corporate profits also comprise a strong proportion of a company's market valuation, increased profits through a superior pricing strategy also creates benefits in enhanced shareholder value. A stronger Price/Equity or PE ratio creates opportunity for increased share value in the stock market. Because pricing touches every area of the company and its shareholders, it is critical to put a sound pricing strategy in place. Rafi Mohammed demonstrates how to improve pricing policy, while increasing profits, and boosting the market valuation of the company.
Rafi Mohammed (photo left) recognizes that most companies have conflicting departmental issues involving how to price products and services. They range from maintaining target margins, to cost plus calculations, to winning market share through discounted pricing. The author describes these competing pricing pressures as confusing and counterproductive. Because pricing strategy can solve these dilemmas, through many simple and creative techniques, company executives should examine their current pricing policies and seek improvement. For Rafi Mohammed, that starting point is an internal company conversation on pricing policy including organizational goals, to find common ground for establishing a unified pricing strategy.
For me, the power of the book is how Rafi Mohammed demonstrates the critical importance and direct impact on profits, that will result from developing and implementing a pricing strategy. Many of the techniques described in the book are very simple, and can be applied immediately by any business, for instant profitability gains. The author goes beyond theory, and provides real world case studies of leading companies who have created and utilized pricing strategies effectively.
Rafi Mohammed recommends the positive approach of developing and implementing a company pricing strategy that prevents falling back into outdated and ineffective pricing methods that leave profits on the table. One of the strongest concepts for pricing, suggested in the book, is moving away from the idea that there are only two pricing levers of either raising or lowering prices. That simplistic theory is discarded by Rafi Mohammed as he provides over fifty different pricing tactics to gain incremental markets and profits from many niche markets.
I highly recommend the innovative and practical book The 1% Windfall: How Successful Companies Use Price to Profit and Grow by Rafi Mohammed, to anyone seeking a powerful and revolutionary new strategy for pricing products and services effectively. The book contains pricing tactics that any company can apply immediately to their products and services. At the same time, the author describes how a pricing strategy is much more than simply raising or lowering prices, and is about capturing the value that the customer places on the product or service.
Read the profit enhancing and value building book The 1% Windfall: How Successful Companies Use Price to Profit and Grow by Rafi Mohammed, and create a powerful pricing strategy that will serve as a competitive advantage in any economic climate. Regardless of the size of the 1% windfall, a proper pricing strategy is a profit builder for any company.
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