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About Three Pricing Strategies

Words are powerful, and it’s dangerous to ignore that power.

For example, “inflammable” and “flammable” mean the same thing.
“Strategy” and “tactics” however, don’t mean the same thing at all.**

[Strategy] is the general direction, [tactics] are specific steps taken.**

If we have to go get to the other side of the mountain, it’s a matter of strategy whether we go over it or around it from one side. It’s a matter of tactics which specific paths we take, and using what vehicles.**

Now here comes the danger in using them as synonyms:**

  • changing tactics mid-travel is not only allowed, but it’s also smart. If the planned route is blocked, we can take the river.
  • changing strategy mid-travel is catastrophically expensive. Switching to going around the mountain after a few days of traveling over it means starting over.
And people

Sun Tzu said Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.

There are hundreds of different pricing tactics you can use.  The internet usually calls them “strategies”, but that doesn’t mean that’s what they are. There are only about three distinct pricing strategies in existence: premium, penetration, and economy pricing.

There is no point in going down roads if you have no general direction in mind.  Trying out pricing tactics without a clear pricing strategy is also a long, winding path to nowhere.

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