Chapter 1. Pricing Objectives

Alternate Objectives | Revenue Growth Levers

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[2 min. read]

What’s your pricing goal? 

What’s the objective?

The objective is typically some type of revenue growth. That’s the default and most of the time it’s right.

But pricing is a versatile tool that can achieve a variety of business objectives and it gets interesting if your pricing goal is something else. 

Alternate Objectives

Alternates can represent a short-term sacrifice for a long-term gain.

You may optimize for profit over revenue, or sales volume. You may deploy a loss-leader or try to encourage trials for a new product. 

You may try to stabilize prices, position differently against the competition, or influence perceptions about the product or your brand.

Pricing objectives can be pretty nuanced. This list (next page) can help you explore what some objectives might be and nail down yours so you’re ready for what comes next.

If it turns out you don’t have an alternate goal and you’re really all about increasing revenue, then you can use the Revenue Growth Levers below to increase it.

Revenue Growth Levers

In 3 Frameworks for Boosting Revenue, I share the three revenue growth levers. They are: 

1a. Increase average ticket size

1b. Increase new sales/customers

1c. Increase frequency/repeat purchases. 

That’s it. 

If you want more revenue, you’ve got to move the needle on one or more of these three things.

And pricing affects them all. 

It gets better.

Since frequency is really just an optimization strategy, you only need to consider the two new purchase levers.

Keep ticket size and new sales in mind as you read how they affect pricing strategy and particularly bottom-of-funnel conversions. 

Additional Reading:

The Demand Waterfall: A Modular System to End Chaos, Flaherty, T., 2018.

3 Frameworks for Boosting Revenue, by Chad Jardine

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