OnDemand WTP Pricing Research

Fair pricing blows away low pricing | Computerworld

Here’s the salient part: “It’s important for the company to embrace the fact that not everyone is concerned about price. In fact, many current customers are paying full price already. A better strategy is offering discounts with built-in hurdles, or requirements that must be ‘jumped over’ in order to receive the lower price. This method enables a company to provide discounts to customers who require them while simultaneously charging full price to customers who are willing to pay it. Customers who make the effort to clip, store, and redeem coupons, for example, are credibly stating ‘Price is important to me.’” As if that’s not enough, it opened that section by stating, “Amazon is heavily promoting its Prime program, which makes online shopping more attractive by providing two-day shipping.”

Those words are so wrongheaded, so potentially destructive to any retailer that gets fooled by them, that I think we need to break this down point by point.

“Not everyone is concerned about price” with one proof being that “many current customers are paying full price already.”

The reality is that just about all consumers are indeed concerned with price. The income level of the shopper matters not: Price is an issue for all. That said, consumers have quite a few priorities when it comes to making purchases and, depending on the situation, price may not be at the top of the list.

But just because other elements are, for the moment, more important to a consumer than price for a specific purchase, that in no way means that the shopper is not “concerned” with price. That mistaken logic leap can prove deadly to sales.

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Fair pricing blows away low pricing | Computerworld.

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