Summary

<aside> 💡 The value of a company is the present value of all future profits it will generate.

• Setting the right price is crucial, yet many companies don't price well.
• Focusing on growth can lead to long-term leadership position and extraordinary profits in the future.
• The main difference between growth pricing strategies and profit harvesting is the objective metric. The former focuses on revenues, customers, and sales growth, while the latter focuses on profit margin percentage.
• Five key metrics for pricing success: New Customer Revenue Acquisition Rate, Existing Customer Revenue Expansion Rate, Customer Revenue Churn Rate, Annualized Profits, and Present-Value Discount Rate.
• Growth-focused pricing strategies should focus on new customer acquisition, existing customer revenue expansion, and minimizing customer churn.
• Higher growth rates can be riskier than lower growth rates.
• Any pricing decision that adds risk to future profits should theoretically result in a higher discount rate. </aside>

Notes

the value of your company is really just the present value of all the future profits your company will generate over its life. There is tremendous leverage in changing your trajectory of growth. (Location 164)

PART 1 Foundations (Location 205)

CHAPTER 1 Redefining the Pricing Journey (Location 207)

Every product and service sold since the beginning of time has had a price assigned to it. Setting that price is among the most crucial, most profit-sensitive decisions that companies make. Ironically, very few companies price well. (Location 209)

“Raising prices is not a sustainable source of profit growth.” (Location 261)

Most pricing solutions based on selectively raising prices for expanded margins tend to ignore these other critical customer relationship metrics and the risks imposed upon them when prices are increased. (Location 268)

Stars: market leaders in high-growth markets Cash Cows: market leaders in low-growth markets Question Marks: non-market-leaders in high-growth markets Dogs: non-market-leaders in low-growth markets (Location 297)

Stars are great investment candidates; Question Marks need work; Cash Cows can yield profits but are not good investments; and Dogs should be avoided at all costs. (Location 301)