Monday, January 09, 2012

Book Review: Impact Pricing

How can anyone possibly write a Pricing book that has two glaring omissions: (1) it does not distinguish between Business-to-Business (B2B) and Business-to-Consumer (B2C) pricing, and (2) it does not talk about price elasticity?

The answer is “very easily”, when you are Mark Stiving and you’ve just published “Impact Pricing”. The book focuses on B2C examples because, the fact is, that's what readers are most familiar with. But readers interested in business markets are not disappointed, as Stiving cleverly illustrates where consumer pricing concepts and strategies apply to business markets throughout the book.

So why ignore price elasticity, with the exception of three paragraphs? Stiving’s response is simple and practical: because he has “never seen a company that really knows its demand curve” (p69)? And you don’t have to take his word for it. As Scott McNealy, former CEO Sun Microsystems, once said: “Pricing [is] confusing for us too. In the whole history of Sun, we have never known what demand is, what elasticities are, or what the right prices are for our equipment”

For me, the real highlight of this book is Chapter 4, which could easily have been titled “An Idiots Guide to Value-Based Pricing", so clear, concise and well-structured is the chapter (as is the rest of the book).

It doesn’t matter if you work for a company that’s small or large, selling goods or selling services, or operates in business or consumer markets, there is something in this book for you. This is also, in my opinion, the first book that caters to the needs of the start-up / entrepreneur community, which makes it THE pricing book for the 21st Century.

With this in mind, it should come to the surprise of readers that Stiving blogs at the appropriately-named

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