Setting Profitable Prices: A Step-by-Step Guide to Pricing Strategy--Without Hiring a Consultant, + Website

Part 2

How the Market Will Value Your New Product

As marketers or entrepreneurs, we get so caught up in our products/services that it’s hard to evaluate them from the potential buyer’s perspective. We’re either in love with them, or we convince ourselves we are so that we can better market them.

I can’t tell you how often in management meetings at ABC and then at CBS I listened to executives discount competitor’s products/services as inferior to ours. Fortunately for me, I was able to see through the blindness because I was first at ABC where their executives were certain their High Fidelity and Modern Photography magazines were clearly superior, followed by a management position at CBS where their executives were equally convinced that their magazines—Audio and American Photographer—were superior. Both sets of executives clearly could not be right.

The same applies to individual perceptions. If you ask businesspeople to rank their abilities compared to their peers, more than 85 percent will rank themselves in the top 50 percent. And they are sincere in their beliefs! But the math just doesn’t work.

In some ways it’s similar to parents who can’t see all the faults of their children, or who see them as minor problems when they’re really major problems. We love our babies, our projects, our businesses.

This blindness is why there are five chapters in this section. They’re designed to remove the blinders we all develop, and look clearly and unemotionally through the eyes of your potential ...