Pricing Power

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What is “Pricing Power”?

“The moment you make a mistake in pricing, you’re eating into your reputation or your profits.” — Katharine Paine, founder of The Delahaye Group

Key Points:

• Pricing Power is your ability to raise your prices over time. The less value you capture, the greater your pricing power. It’s related to the economic concept of “price elasticity”: how sensitive are your customers to price variations.
• Pricing Power is important because raising your prices allows you to overcome inflation or increased costs. without pricing power, your business may not be able to remain alive if it faces higher expenses.
• The higher the prices you can command, the more reliably you’ll be able to maintain Sufficiency.

Questions for Consideration:

• How sensitive are your customers to price increases?
• Would raising your prices make it easier for your business to stay sufficient?
• How much room do you have to raise prices without losing too many customers?

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