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Pricing your product or service is one of the hardest things to do, especially when you are first starting out. Searching for the masters in pricing to emulate, businesses that clearly do it “right” is difficult, both because it is such a hard thing to judge as an outsider, and even if you did have all the information, how do you apply it to your unique situation?

A “holy grail” of pricing is something you may never find, (it’s just one page long, with your ideal price in 80pt font)—but The Art of Pricing comes pretty damn close. Rafi Mohammed breaks down different ways to determine your ideal price (of which there isn’t just one!), shows different strategies to capture the largest market share via differential pricing and highlights the pitfalls that many other companies have fallen into along the way.

One of the key points (if not the underlying theme of the entire book) is that to really discover the hidden profits in your business, you have to price your product/service based on the value it delivers to its purchaser—not your costs. Realizing that every client decides how (and how much) your product is valuable to them and bringing your price inline with their determination allows you to maximize the profit you can make from each sale.

I was really blown away by the quantity of tactics Mohammed laid out in the book; this isn’t a one-size-fits-all system but an all-encompassing strategy that you can pick and choose key elements from to apply to your business. The explanations are really easy to grasp and the whole book flows quite well; filled with ancedotes and a fast, clear writing style, this is a pretty quick read.

I’d be lying if I said I wasn’t slightly disappointed that I didn’t obtain a “perfect price” from reading this book, but that’s just the selfish part of me that is searching for that holy grail. This book is the start of your pricing adventure—it lays out the path and gives you a map, but you have to travel on your own.

Regardless, this book is a must read. Even if you think you’ve got your pricing lined up perfect, I guarantee Mohammed will show you tactics to squeeze additional profits out of your business, even while making your clients happier. Just remember, a 1% increase in net price will (on average) boost your operating profits by 11%!

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