Supposedly, Winston Churchill had the following conversation.
Churchill: “Madam, would you sleep with me for five million pounds?”
Socialite: “My goodness, Mr. Churchill… Well, I suppose… we would have to discuss terms, of course… “
Churchill: “Would you sleep with me for five pounds?”
Socialite: “Mr. Churchill, what kind of woman do you think I am?!”
Churchill: “Madam, we’ve already established that. Now we are haggling about the price”
Although this is a fun story, it has a point. Everything really does have a price.
A long time ago people bartered. They traded a filet mignon for a fine bottle of wine. (OK, maybe the details are a little off). How many bottles of wine is a filet worth? It was different for each transaction, very inefficient and definitely unpredictable.
Then someone invented money (probably the guy with the printing press). This made it much easier to trade filet’s today for wine tomorrow. You could even throw wheels or hut-cleaning into the transactional mix because money gave everything relative values.
Finally we get to Kent Monroe, who invented pricing. The art and science of understanding how much a customer is willing to pay and trying to get as much of that as possible.
Come to think of it, pricing isn’t that ubiquitous. Prices are. Pricing is still a new and growing field. It is extremely underutilized in most companies today.
But let’s look at the half full glass. Because everything has a price, pricing has the potential to become … ubiquitous.
Mark Stiving, Ph.D. – Pricing Expert, Speaker, Author
Photo by Paul Watson
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