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Designing Pricing Strategies: Don’t Ask – Experiment! | MindTheProduct

At ProductTank London, Tom Whitwell shared a series of excellent examples of why customer responses to pricing strategies often appear to be irrational, and why you need to test your theories and experiment to uncover the patterns in your customers’ behaviour. As part of the team that introduced the paywall in front of The Times, he knows first-hand that although changes in pricing can dramatically change the demographic and reduce the volume of your customers, they can still turn out to be counter intuitively profitable.

Pricing is an Unconscious Trigger
Pricing doesn’t just represent a number, it’s about percieved value, which can lead to strong emotional reactions. We can feel angry, envious, disgusted, frustrated, and elated when we see prices. Pricing that is perceived as excellent value can trigger an almost automatic instinct to buy something, or it can make us suspicious of why something is so cheap. Pricing that we perceive as too high can instantly convince us that a certain product is “not for us”, allowing companies to shape their market through price, rather than features.

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Designing Pricing Strategies: Don’t Ask – Experiment! – MindTheProduct.

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