How to Stop Undercutting and Start Profiting


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The Duct Tape Marketing Podcast with John Jantsch

In this episode of the Duct Tape Marketing Podcast, I interviewed Carolyn Crewe, an expert on pricing strategies for businesses. Crewe’s extensive background includes earning an MBA, completing pricing courses at MIT, and nearly a decade of hands-on experience in the field. Her journey into pricing expertise began with her own business challenges, leading her to understand that pricing is a crucial lever for boosting revenue. In this episode, we uncover the common pricing mistakes businesses make and how to develop confidence in your pricing to stop undercutting competitors and start profiting.

Key Takeaways

With years of experience in pricing strategy, Carolyn Crewe shares her insights into overcoming common pricing obstacles. She emphasizes the importance of not blindly copying competitors’ prices, as this can lead to underpricing and lost revenue. Crewe points out that many businesses fall into the trap of a one-size-fits-all pricing approach, which fails to capture the varying willingness to pay and perceived value among different customers.

Crewe highlights the significant role mindset plays in pricing decisions. Many business owners lack confidence in their pricing, fearing they will lose clients if they charge more. By understanding the true value they provide and effectively communicating this to customers, businesses can set prices that reflect their worth and attract the right clients.

One of the critical strategies discussed is moving away from cost-plus pricing, which focuses on covering costs plus a desired profit margin. Crewe argues that this approach limits profitability and does not align with customer perceptions of value. Instead, she advocates for value-based pricing, which considers the benefits and outcomes the customer receives.

Additionally, Crewe addresses the challenge of perceived risk in pricing. By offering tiered pricing packages and incorporating elements like guarantees, businesses can provide options that cater to different customer needs and budgets while reducing perceived risk. This approach not only enhances customer satisfaction but also maximizes revenue potential.

By implementing these strategies, businesses can gain the confidence to set prices that reflect their true value, avoid the pitfalls of undercutting, and achieve greater profitability.


Questions I ask Carolyn Crewe :

[01:02] What are some of the biggest challenges, obstacles, businesses typically face when it comes to pricing?

[02:16] How much of this boils down to your mindset?

[03:40] Are there differences in selling services as opposed to the traditional product-based model?

[05:50] What is the the approach to pricing professional services, particularly?

[09:12] Explain the universal law that states ‘the less somebody pays you, the more demanding they are’

[10:55] Talk a little bit about that kind of signal that you’re sending with the price you set

[12:51] How much is Pricing a function of Marketing?

[15:23] Where do things like guarantees fit into the pricing matrix?

[16:36] Would you agree that value-based-pricing is harder to deliver?

[18:30] How do you effectively mitigate brand damage and increase the value of your services when you increase your price?

[22:22] Is there someplace you might invite people to connect with you or find out more about your work?


More About Carolyn Crewe:



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