Pricing Has a Judgment of Review Before the Judgment of Amount
For a business owner, pricing is one of the loneliest decisions. Raise a price and you worry about losing customers; lower it and your profit is cut. Because of that weight, the review of pricing itself gets postponed, and before you notice, the price has been left unchanged for years.
The central point of this article is to treat pricing, before the judgment that decides the amount, as the judgment that decides when to review it. It does not declare whether raising or lowering a price is advisable; it presents a framework for how to create opportunities for review.
Venus Goes Around Once in About 225 Days
Venus takes about 225 days to go once around the Sun. Because it never moves far from the Sun, it is a star seen in the morning or evening sky. Venus is sometimes read in connection with the worth of things and the balance with what is paid for them.
A cycle of about 225 days is a medium-sized unit: shorter than a year, longer than a quarter. Used as the interval for reviewing pricing, it creates a rhythm slightly finer than once a year, but not improvised. The idea is to place, by cycle, a period for looking at the single point of price alone, separate from fixed confirmations such as the closing of accounts or inventory counts.
What to Check When the Review Period Comes
When the review period comes, the first thing to check is not the amount itself. First, look at whether the content you are providing at that price has changed since the time the price was decided. If the content has increased while the price is the same, that is a state in which a substantive price cut has been quietly advancing. Conversely, if you have narrowed the content while the price is the same, the balance with the other party may have broken down.
Next, check changes on the cost side. If costs such as purchasing and personnel change, the structure of profit changes even at the same price. A review of price is not something done for the seller's convenience alone; it is done after confirming changes in the structure in numbers.
Here is one concrete work example: a situation where, at the time of review, you wash out whether the work content of a standard job you have long accepted at the same unit price has increased since then, or whether it has decreased through greater efficiency. As a result of the washing out, a conclusion of not changing the price is also possible. What matters is that not changing becomes not "postponement," but "a judgment made after confirmation."
Think About Raising and Lowering on the Same Ground
Raising a price takes courage, and lowering one tends to be decided quickly. This asymmetry is a cause of distortion in prices. If only decisions to lower proceed quickly, prices keep moving in the downward direction only.
Placing the review period by cycle has the meaning of leveling this skew. When the period comes, you examine both the direction of raising and the direction of lowering, through the same procedure of confirmation. If you keep a form where the direction is not decided first, but emerges as a result of the confirmation, pricing becomes less likely to be pulled along by emotional movement.
How to communicate a change, and how to choose its timing, differ depending on the relationship with the client. What this article deals with is limited to the stage before that: the owner making the judgment of review a regular practice.
The thinking is the same if you are self-employed. Even if the other side of your pricing is an unspecified number of customers, the order — decide the review period first, confirm changes in content and costs, and then think about the amount — does not change. If anything, because no organizational check intervenes, whether or not you have a mechanism for deciding the timing is exactly what separates whether a review happens at all.
Leave a Record of Your Pricing
One more important thing in pricing is a record of the reasons you decided. If you briefly write down why you set that price, you can build on the previous judgment at the next review period. Without a record, you end up thinking from the beginning at every review, and that becomes a reason for postponement as well.
Venus's cycle of about 225 days can be used as the rhythm for turning the pair of record and review. A horoscope does not teach you the right price. Please use it as a regular guide for checking, so that the heavy decision of pricing is not carried alone and postponed. The one who decides the price is the business owner, and that judgment is made on the basis of numbers and the relationship with the other party.