Hey..., I've got a really radical idea.....Why don't we assume that the guys at 2by3 don't all have
their heads up their butts and chose the price based on trying to get a rational return on their
investment of time and effort?....Like breaking even..., because I will bet you that none of them
are getting rich on WITP.
Your making an important assumption that bad pricing strategy is because of a fundamental problem "heads up thier butts" on the part of the person setting the strategy. In my personal experience which includes working with the guy who wrote the book on pricing strategy (google Nagle and pricing if your curious) this is never the case.
Usually its a question of knowledge and time. Most people don't know much about pricing strategy because most people don't make pricing desicions that often. Usually pricing decisions at smaller companies are made at launch and seldom revisited. There are simply too many more pressing issues to deal with. Also if your faced with many critical decisions about other aspects of you business and a few times a year decision about pricing what would you spend your time studying? A smart executive would not spend time on pricing because other things are more pressing and occur much more often.
The other thing to remember is that pricing strategy is seldom bad, its usually just sub optimal. Its very hard to tell if your pricing strategy is sub optimal and its hard to fix if it is.
I don't assume that the folks at Matrix have thier heads up thier butts, or are foolish in any way. But I do assume that they face many of the same pressures that other small and meduim size companies face and a less than optimal pricing strategy is often a result of dealing with those pressures.
(disclaimer I do not currently work with Dr. Tom Nagle but I have in the past and learned a lot from him)