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A Series of Fortunate Events

How do you use pricing incentives to accelerate growth of new customers without lowering prices for existing loyal customers?



One of the big ideas in my new book, Price for Growth: A Revolutionary Step-By-Step Approach to Massively Impact the Value of Your Company by Leveraging Focused Pricing Strategies, is that companies can (and should) create “focused” pricing strategies to improve the pricing metric that has the most significant impact on increasing the company value. For many companies, this metric is New Customer Revenue Acquisition Rate (NCRAR), or simply put, the acceleration of new customer acquisition.


Traditional thinking has been that you accomplish this by lowering overall price levels. After all, that is what downward sloping elasticity curves suggest—lower prices equal more sales.


But this is a clumsy way to try to accelerate growth. This is akin to thinking you can make your car go faster by putting more gas in it, presuming if gas is what makes your car go then more gas would be what makes it go faster. In order to succeed you have to get more focused and specific.


Sales are based on customer purchases. And customer purchases are based on the culmination of a string of many events that must go right in order for a purchase to occur.

Sales don’t just happen. For a sale to occur, you need a “series of fortunate events” to take place.

  1. A prospective customer must sense a need or a problem they want to solve.

  2. The problem must be big enough to catch the customer’s attention

  3. The prospective customer must be motivated to look for a solution

  4. Then they must see your solution as a viable alternative

  5. Then they must believe that your solution is the best value proposition, given their current situation… perhaps it is the most convenient; perhaps it is the most economical; perhaps it is the most trustworthy approach to solving the problem; … whatever the reason, they must believe your solution is best for their situation right then. This includes believing your price is acceptable.

  6. Then once the customer has decided they want to purchase from you, they need to go through the buyer experience required to place the order. During this event, if the buying process is too difficult, too lengthy, or too disruptive, they may abandon the purchase. So, it needs to be easy to buy. At this point, if the value proposition is big enough to survive any friction in the buying process, an order will be placed--a purchase.

  7. Then after placing the order, it's not over yet. The order needs to be delivered or fulfilled according to acceptable expectations. If not, the customer may lose patience and cancel the order or buy from someone else.

Looking at everything that has to happen for prospective customers to become new customers, it’s easy to see that simply lowering a price will not make more customers buy or make them buy any faster. Price plays a role in only a few of the events that must come together to acquire a new sale. In order to accelerate the acquisition of new customers, companies must specifically address all the individual events that are currently limiting the rate of new customer purchases.


By dissecting the customer journey, it’s possible to unlock the flood gates of critical events that must take place for prospective customers to become customers, and “focused” pricing strategies can actually play a vital role in some, if not all, of them.


Growth strategists must ask themselves the following questions:

  • How can we help prospective customers recognize a need or problem they have, which they may not recognize currently? How can we help them recognize that problem faster?

  • How can we help prospective customers come to the conclusion that the problem is big enough that it should be solved urgently?

  • How can we help stimulate our prospective customers to increase the urgency with which they look for solutions to solve the respective problem solved by our products and services?

  • How can we make it easy for customers to learn about our solution and why it is superior to other potential alternatives?

  • How can we improve the prospective customer’s perception of our solution’s value proposition?

  • How can we make the buying experience easy, frictionless, and fast?

  • How can we ensure that customers get excellent service and have an excellent experience with our solution?

All of these questions have an answer, and most of these questions have multiple answers. And believe it or not, there are focused pricing strategies that can help answer almost all of those questions.


The right focused pricing strategies can be discovered by asking the appropriately logical questions for each respective stage in the buyer journey. For example: In what way could a pricing incentive help a customer recognize they have a need or problem that requires a solution like ours? Perhaps, we could incentivize the prospective customer to learn about the potential impact of the problem and not solving it by offering them an incentive to watch a short YouTube video and provide feedback via a short survey.


Pricing is not only about incentivizing the final purchase. Creative strategies can be used to incentivize prospective customer engagement and help them through the buyer journey.

In Chapter 15 of my new book, Price for Growth, I outline how pricing strategies can be designed to improve awareness, trial, onboarding, repeat purchases, and even advocacy, all important phases of the customer journey. Potential pricing strategies and incentives can include a number of creative options, some of which aren't typically thought of as pricing incentives: free purchase credits, free product samples, discounts, rebates, and money-back guarantees of up to 100% or even more, each as a potential incentive to help a customer move their way through the buyer journey. And if these incentives are well designed, they can be implemented without adding any risk to existing customer prices, profitability, and relationships. We refer to these as “focused” pricing strategies because they are designed to surgically accomplish a specific mission without disrupting existing customer buying inertia.


With flexible break-even calculators and tools (some of these are provided free to those who purchase my book at PriceForGrowth.com), it’s easy to compare break-even thresholds to hypothesized outcomes to determine ahead of time how valuable the particular strategy might be to your bottom line, your investment ROI, and even the valuation of your company.


Of course, New Customer Revenue Acquisition Rate (NCRAR) is just one of the “Five Sacred Metrics” of pricing success I share in my book, and there are potential focused pricing strategies to help improve any of the other four sacred metrics, as well, including:

  • Existing Customer Revenue Expansion Rate (ECRER)

  • Customer Revenue Churn Rate (CRCR)

  • Annualized Profits

  • Present Value Discount Rate (PVDR) (a measure of risk regarding future revenues)

(You’ll find these discussions in chapters 16-19 of my book, Price for Growth)


Using opportunity discovery tools, pricing strategists can determine which improvement metric will have the biggest impact on company value and which improvements will be easiest to achieve.


As you consider the “series of fortunate events” that must occur in order for a new prospective customer to initiate a purchase, it becomes clear why things like price integrity, price transparency, price fairness, and price rationality become critical in streamlining the buying experience and removing unnecessary friction, including discretionary discounts and price negotiations.


In summary, it is very possible to accelerate new customer acquisition without risking prices and profits generated by existing customers. Focused pricing strategies based on high-impact improvement opportunities is the answer.


Happy strategizing!



About the Author: Jeff Robinson brings the perspective of two-decades working with companies across industries to help them improve their pricing practices and results. He has designed, marketed, and implemented pricing solutions used by hundreds of companies, whose combined revenues total more than one trillion dollars. Having earned a bachelor’s degree in economics, combined with an MBA in marketing and finance, he has brought new perspectives to the world of pricing, often challenging prevailing notions or widely accepted strategies. Combining his formal education with over 20 years’ experience, he has recently authored the book, Price for Growth, A Step-by-Step Approach to Massively Impact the Value of Your Company by Leveraging Focused Pricing Strategies. Today, he is leading the development of a new company, Revolution Pricing, focused on helping companies create and select appropriate pricing strategies for maximizing the value of their own companies.

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