Pricing Uncertainty Principle
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What is the “Pricing Uncertainty Principle”?
“Everything you want in life has a price connected to it. There’s a price to pay if you want to make things better, a price to pay just for leaving things as they are, a price for everything.” — Harry Browne, author of Fail-Safe Investing
Key Points:
- The Pricing Uncertainty Principle states that all prices are arbitrary and malleable. Pricing is an executive decision. You can charge whatever you want!
- The key is being able to support the asking price for a customer to accept it. You must be able to provide a Reason Why the price is worth paying.
- Keep in mind that, in general, people prefer to pay as little as possible for what they want (with some exceptions, discussed in Social Signaling).
Questions for Consideration:
- How are you currently deciding to set your prices?
- How are you supporting that price?
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