Holden Advisors Blog

We see it often, companies build extensive product portfolios over time, ultimately paralyzing the organization with maintenance activities, instead of focusing on the strategic and tactical elements that deliver value to their customers. This is often referred to as product proliferation. Some causes include:

I recently renewed my car insurance. It had been a few years since I’d changed the policy, and the cars were now half a decade older, so I decided to call GEICO to see if they could save me some money; after all, they promise new customers that 15 minutes can save them 15% (or more) from their bill. I was underwhelmed with the call. It turned out they could offer me very little, even though the policy had declined in value due to the lower value of the vehicles covered. So I decided to shop around with competitors, and lo and behold, Progressive could save me – a new customer – $400 a year on my plan.

Dynamic pricing is a hot topic right now. With the advent of big data and IT quoting systems, many businesses are excited at the prospect of charging each customer at their willingness to pay for their product, rather than a flat or segmented price. As Bob Crandall, former CEO of American Airlines once put it “If I have 2,000 customers on a given route and 400 prices, I’m obviously short 1,600 prices." Think of all that money you’ve been leaving on the table with regular segmentation; if you could grab that, your profits would go through the roof!

So there it is. Amazon’s year long quest for its second headquarters has finally ended with an announcement that the will be shared by two cities, Long Island City, New York and Arlington, Virginia. When Jeff Bezos first announced the plan for HQ2, he promised to scour the nation for the right candidate, soliciting bids from cities across that nation outlining their plans on infrastructure, education and, of course, the tax breaks they were willing to give to have the honor of hosting Amazon’s second home and the jobs and prosperity that would bring.

At a recent networking event, I was chatting with a pricing manager from a major company famed for their innovation. She made a comment that really struck me:

When deciding on the price to charge in the market, many companies look to price elasticity— how the volume sold changes with the price charged to work towards what they hope will be a profit maximizing price.

Celebrating 10 Years of Pricing with Confidence (video 4 of 11).

In our most recent pricing improvement project, we were tasked with finding some low-hanging fruit to execute in 60 days. Our client, a $9B company that has grown as a result of multiple acquisitions is dealing with very complex systems, process, and people integration issues.

During a recent conversation, a pricing manager from a client confessed he felt frustrated with his current state of affairs. He felt the way his company manages pricing is reactive. Exasperated, he cried out, “I want people to stop asking me what we want our prices to be, and start asking me what we want our prices to do!”

Nothing beats the smell of a real Christmas tree. Every year on the weekend following Thanksgiving, my wife and I head to the local pop-up seller where tree farmers from up north display their wares of Balsam, Frasers, and Douglas Firs. We evaluate each tree based on size, ability to hold ornaments, the shape, propensity for needle drop, etc. and select a full tree carefully measured to be one inch lower than our ceiling.