Pricing Technology Breakthroughs: The Glock Lesson – Forbes

Yes, this is a good strategy. Watch out for things like too big a gap between important clients and general public, and charges against discrimination other than business basis. Also, the discrimination should evolve along time. shallow discount at the beginning and deeper later stages.

Price discrimination is one option. The company with new technology might quote a high price to some customers, but offer discounts to those who are most sensitive to price.

A sale is not just a transfer of a product for money. Take my consulting services. It looks like I swap my expertise for cash. That’s accurate, but not complete. Some customers are prestigious and influential. I garner not just cash but also a halo effect when I talk about my client list, as well as referrals to new customers.

Glock kept its price high to the public, but offered deals to police departments across the United States. The police departments threw something else into the bargain: credibility. The police won’t use an unreliable, inaccurate gun, right? So the Glock must be a good product.

via Pricing Technology Breakthroughs: The Glock Lesson – Forbes.

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