The greatest challenge in pricing is the human factor. To price effectively, customer psychology usually trumps rational microeconomic thinking.
- How did Subway turn one accidentally discovered price promotion into a multi-billion dollar success story?
- How much knowledge of prices do customers really have?
- Why do most people spend two months’ salary to buy an engagement ring?
- Does Pay What You Want pricing really work?
- How can you get your customers to trade up?
- Why do Supreme t-shirts sell for $1,500 or more?
- Why do so many consumers hate Uber’s surge pricing even though economists love it?
In Priced to Influence, Sell & Satisfy, you will find answers to these and many more questions. The book introduces the latest thinking about Psychological Pricing, the science of designing effective pricing strategies using behavioral economics principles. You will learn how customers search for, evaluate, share, and use prices in their buying decisions, how they participate in setting prices, and what managers can do to understand and influence these processes. Psychological pricing actions are levered. Many of them require relatively small investments and produce disproportionately large returns to the business.
Pricing decisions are make or break decisions for a company. When made using a structured process and when executed competently, they can propel it towards sustained differentiation, rapid growth, healthy profits, satisfied customers, and engaged employees.
But if pricing is done haphazardly, using old traditions or with cookie-cutter methods, it can lead to lost opportunity. Defective pricing fritters away a company’s competitive advantage, leaving customers irate, employees confused, and sales in a freefall.
- What is a good pricing decision?
- What factors should you consider and what methods should you use when making pricing decisions?
- Is charging revenue-maximizing prices the best thing to do? Alternatively, is the price that maximizes the company’s profit the best one?
- Can you do both, maximize revenue and profit simultaneously?
- Which factors should you consider when setting and changing prices?
- How can you earn the prices you have set?
- How will you know that you have made the right pricing decision and that your pricing strategy is working?
- What performance measures should you track to evaluate your pricing?
- What are the pricing best practices in business and consumer markets?