Abstract
PurposeThis article illustrates how companies can render themselves vulnerable to inappropriate price comparisons if their pricing structure hides the true value of their services from customers, and offers strategies for overcoming pricing problems.Design/methodology/approachThe examples cited all stem from the author's extensive experience helping companies become more effective at strategic planning and implementation in many areas, including pricing.FindingsCompanies can avoid getting “McKinseyed” by unbundling their services and making a strategic decision to charge for everything.Practical implicationsCompanies must make sure their value proposition correlates with their customers' reality, and make that value clear to customers by refusing to allow it to be obscured by the mechanics of billing. The executive team must also understand the company's customers and what elements of the service they value.Originality/valueThe value of this article to corporate executives lies in its reality‐based perspective on the pitfalls associated with pricing services and its practical recommendations for avoiding or overcoming pricing problems.
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