Ariel Baños' book, CARato: Sell High and Be Cheap , was presented at our headquarters library. In it, the author proposes a new perspective on pricing strategy and how to build value propositions for which customers are willing to pay more. Based on this model, the book invites companies, SMEs, and entrepreneurs to rethink how they define their prices and compete in the market.

Why do some companies manage to sell at higher prices and still retain a large number of customers? That's the question behind " CARato ," a concept created by Baños to explain how leading companies in various sectors get their customers to be willing to pay more for their products or services.

What are the key points?
The model proposes working on three pillars: Customer knowledge, the differentiators in the proposal and the way of communicating it.

“You can sell at a high price and still sell a lot. The key is identifying your target audience,” the author explains. He points out that one of the most frequent mistakes companies make is trying to sell to everyone, without considering that the value of a proposition also depends on who receives it. From there, the challenge is recognizing what a company offers that its competitors cannot and how to communicate that difference so that the customer understands why it's worth paying a higher price.

These differentiators can be linked to experience, logistics, service quality, innovation, trust, or brand support. It's not about arbitrarily raising prices, but about building a proposition that generates genuine value for the customer. "The problem is when the customer doesn't understand why I'm more expensive. If you're more expensive and you can explain it, that's perfectly fine," he maintains.

The risk of competing solely on price

In a market where companies are trying to maintain sales and attract increasingly budget-conscious consumers, resorting to discounts and promotions might seem like the quickest solution. However, the book warns that this strategy has consequences: “When I choose to win customers through price, my competitors aren't going to sit idly by; they'll probably do the same, and that's how we create a price war that ultimately lowers the profitability of the entire market.”

And differentiation cannot be static: companies constantly need to review their offerings, innovate, and find new ways to respond to the needs of their audiences. An attribute that distinguishes a brand today may become a market standard tomorrow.

Price as a strategic decision

Another key point of CARato is that pricing should be addressed from the very beginning of a business , not as a variable defined at the end of the process. A wrong decision can prevent an attractive proposal from being economically sustainable and limit the ability to invest, improve service, or develop new solutions. “Argentine business owners were somewhat spoiled; in an environment of crisis and inflation, consumers didn't understand what they were paying for and accepted any price. Today, it's essential to start implementing Price Management tools,” Baños concluded.

Because, as the book summarizes, the goal is for the customer to feel that, although they paid a high price, in the long run it was a good decision.