Strategic Pricing Decisions: How To Generate Fast-Cycle Profits & Growth By Offering Customers Pricing Choices

Unlock a financial windfall.

Dear Friend, Subscriber, and Category Pirate,

We're excited to introduce a special "Contributing Pirate” series to Category Pirates starting this month.

Once a month, you'll read a mini-book written by a successful Category Designer who has effectively carved out a niche in their market. These guest contributors will share their unique insights, experiences, and stories. To give context to their writing, we will also explain our take on their strategies and share how they connect to the broader landscape of category design. (See this video at the bottom of this post.)

The goal is to explore new territories in category design and creation, directly from those who've navigated these waters successfully!

Here’s a short explanation from Pirate Eddie on this new mini-book series:

We hope you enjoy this first “Contributing Pirate” mini-book by Rafi Mohammed, a pricing strategist.

Rafi Mohammed, Ph.D is the founder of Culture of Profit, a Cambridge, Massachusetts-based company that consults with businesses to help develop and improve their pricing strategies. He is the author of The Art of Pricing (originally published by Crown Business) and The 1% Windfall: How Successful Companies Use Price to Profit and Grow (HarperBusiness). He has written 96 articles on pricing strategy for the Harvard Business Review (see his articles here), which helps businesses unlock significant value by optimizing their pricing models. His knowledge makes him a leading voice in the niche of pricing strategy, offering valuable lessons on how pricing plays into designing and dominating a category. Rafi was born in Milwaukee, raised in Cincinnati, and is an avid Bruce Springsteen fan.

Now, let’s dive into Rafi’s take on how pricing contributes to category growth.

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There is a fundamental “profit disconnect” in business today.

Companies work to bring a product to market by investing significant effort and money in research and development, distribution, and marketing strategies. But when it comes to setting a price—how businesses get compensated for their hard work and financial risk—most companies drop the ball. Critical pricing decisions are often made using arbitrary “this is the way we’ve always done it” methods.

Companies are shortchanging themselves every day.

Setting prices is often a daunting task for managers. With a lack of clear pricing strategies and practical advice, it is no wonder that many companies stick to the status quo. The current approach to pricing is often reactive, leading to a mix of cost-based pricing, margin maintenance, ad-hoc analyses, and competitive matching.

Since pricing is an underutilized strategy, it is fertile ground for new profits.

Most companies do not realize the direct link between prices and their profits.