Pricing Strategies for Uncertain Times

HBR IdeaCast

Harvard Business Review

Teams, Business/management, Marketing, Strategy, Management, Innovation, Finance, Entrepreneurship, Economics, Hbr, Business/entrepreneurship, Harvard, Business, Leadership, Business/marketing, Communication

4.3 • 1.9K Ratings

🗓️ 7 July 2020

⏱️ 22 minutes

🔗️ Recording | iTunes | RSS

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Summary

Rafi Mohammed, founder of the consulting firm Culture of Profit, says a crisis or recession is not the time to panic and slash prices. He says leaders should instead reevaluate their price strategy — or develop one for the first time — to better respond to customers during the slump and keep them when the economy recovers. He shares examples of companies across a variety of industries that have created effective price strategies as well as his advice for changing prices in response to Covid-19. Mohammed is the author of “The 1% Windfall: How Successful Companies Use Price to Profit and Grow.”

Transcript

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0:00.0	How do you navigate gender in your workplace?
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0:16.0	Women at Work wherever you get your podcasts. Welcome to the HBR Ideacast from Harvard Business Review. I'm Kurt Nickish.
0:38.0	As many businesses continue to operate in crisis mode, their leaders are making a lot of
0:49.2	tactical choices to, well, just stay in business. From day-to-day decisions to long-term strategic
0:55.8	ones, the goal is to keep your organization afloat now and claim market share of the demand
1:01.3	that does return when the crisis is over. And a key aspect of all
1:05.8	of this actually is setting prices. In panic mode, whether you're a car manufacturer or an airline or a self-employed consultant
1:14.3	the initial instinct might be to start slashing prices the idea being to hang on to
1:19.6	more customers and keep revenue coming in.
1:22.9	On the other hand, say you're a food delivery company or a cleaning supply company,
1:27.0	you're seeing a spike in demand or maybe expecting to serve pent-up demand.
1:31.5	Your initial reaction might be to raise prices. But today's guess
1:35.8	says going with those initial reactions without thinking through your pricing
1:40.1	strategy can end up really hurting you.
1:43.0	Joining us today is Rafi Mohammed.
1:45.0	He is the author of the book The 1% Windfall,
1:48.0	how successful companies use price to profit and grow.
1:52.0	And he founded the consulting firm Culture of Profit, where he helps
1:55.6	companies develop their pricing strategies, including I want to disclose Harvard Business Publishing.
	...

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