Brand Pricing

By: TY Montague

Money talks. Unfortunately, in most companies, the power of story to affect pricing still remains unknown, or at least it’s vastly underutilised. Pricing strategy usually follows one of four tracks.

Bottom up: calculate the cost of everything that goes into the product, and add a fair margin on top. Sideways in: analyse and adopt the price of competitors’ products.

Top down: target a demographic or economic segment, and engineer the product to meet that price. Or, dynamic: use a complex, realtime calculation to gauge supply and demand, usually with the help of an algorithm.

What you almost never hear about is a fifth track that I call story analysis: an analysis of a product’s capabilities to fulfil a profound human need, to tell a story that gives your customer’s lives richer meaning.

In a world of abundance, what your product does for your customers is important, but not nearly as important as what your product means to them.

And this second part — the story of your product — is what yields the greatest pricing power of all… As the number of products and brands in the world proliferate, the power is only increasing. In 1997, there were 2.5 million brands in the world. The number is now approaching 10 million. The trend is rapid commoditisation of just about everything.

In a world of overwhelming abundance, an authentic, meaningrich story becomes the most important ingredient to drive acompany’s margins up. From “If You Want to Raise Prices, Tell a Better Story”