Book Review

Ron Baker has written a fascinating book on pricing.

Rarely is pricing done for the purpose of creating value for the customer. The strategy for pricing put forward in this book is to create and capture value for the customer.

In just about any given business, prices are a result of cost, tracking the margins and other methods that don't take the customer in consideration. It is looking in to the past and not the future. Ron proposes a different strategy for pricing, a strategy to price on propose, as the title of the book suggests. It is value, not cost, that determines price.

What I found the most inspiring in the book is the introduction of a CVO (Chief Value Officer) in to an organization. Ron profiles the world's first CVO in the book.

Ron states that the characteristics of a CVO are to "understand that there is nobility in getting paid what the company is worth. Nothing is more satisfying than customers who believe—and act on the premise—that they get what they pay for. Perhaps the first important characteristic of a successful CVO is high self-esteem; they believe that their company's product and services are worth every penny they charge. They are more concerned with developing a value proposition based on value, not price."

I highly recommend this book. It has already become a reference book for me as I learn more about running a successful business.

I will post another blog with a few quote from an essay I read today from Ron.