We present a theory of price and quality decisions by managers who are self-serving. Because firms seldom approach a market with equal emphasis on these product [...]
I research, teach and work with executives on the “back end” of customer orientation. That is, I am fascinated by how organisations choose to earn a profit from their efforts to stand out and serve the market. It is exactly at this moment, when a business asks customers to exchange good money for the products and services it supplies, that bad habits creep in.
Indeed, the task of pricing one’s offerings is one that professionals seldom talk about with enthusiasm. Although most understand that their decisions may make or break the bottom line, they act without the aid of a carefully-crafted strategy. Rather, you witness collections of tactics held together by questionable assumptions and crude heuristics that, by shunning customers and obsessing over just about everything else, put financial and brand health in jeopardy.
I often stress that a proper strategy blends economics, sociology and psychology—as prices play different roles in a market. Mastering this mix opens up opportunities to capture, communicate and even grow value in the eyes of paying customers.
Research for academia
Research for practice
Teaching monetisation implies covering several topics. Above all, it is important to understand that an effective strategy first addresses the revenue model of the business, then reviews processes to set prices and defend them against customers and competitors, and finally sets rules to vary prices according to the circumstances of the market. At each point, the discussion usually turns to the question of “value:” is the business truly different from competitors and meaningful in the eyes of customers.
Work with companies
I engage with practice in several ways. By far the most common formula is work tailored to the specific need of the business—a keynote speech at a conference or important gathering, a private workshop, or a consulting project where I act as an independent advisor. However, I also run open executive education programmes on behalf of academic institutions, including of course at ESADE. Finally, I am constantly on the lookout for collaborations slanted toward research (whether this be a formal academic study or, say, a case study).
“A cynic is a man who knows the price of everything, and the value of nothing.”