OnDemand WTP Pricing Research

This Week in Pricing > 7/12/14

TWIP is a recap of the week’s top pricing strategy in the news and resources for pricing professionals. We also publish a daily digest of top pricing news, strategy expert and technology leader’s thought leadership and industry news and events.


The Past Week’s Top Pricing Related Headlines

The Worst Kind of Customer… | The Sales Hunter

They bought on price, not on the solution you’re providing them. This low-price customer is now going to badger you and your customer service team and everyone else for days, weeks and months over what they bought.  In the mind of this low-price customer is the belief they can push anyone enough to get what […]

Pricing Strategy for Business Success | Lead Investor

Potential customers trade off perceived attributes with price. Because the features of the alternatives are often similar, small differences in price can swing a purchase decision. In the world of pricing, this is where the leverage is. Not only is the “Which one?” decision most commonly the last decision the customer makes; it is also […]

Compilation – Consumer Inferences and Processing of Price Information | American Marketing Association

Selections from Journal of Marketing​ June 2014 | Pricing The importance of price with regard to consumer store and brand choice decisions cannot be overstated. However, a widely known truth among marketing practitioners and academics alike is that consumers do not respond to price per se; rather, they respond to their mental representations of price. Thus, […]

Five ways to improve customer engagement | Institute of Grocery Distribution

It comes as no surprise to see that the number one retailer priority in this year’s IGD trading relationship survey was price and promotion. The difference this year was that 84% of retailers rated it as their number one priority, the highest we’ve seen. In a number of markets, especially in western Europe, this result […]

Uber’s Brilliant Strategy to Make Itself Too Big to Ban | WIRED

Uber wants to grow as quickly it can, and right now, it’s chasing that goal by undercutting the competition on price—even if it loses money in the process. This isn’t a novel approach among tech startups, for which profits aren’t valued nearly as much as popularity. But for Uber, playing in the new realm of […]

Uber agrees to new national policy that will limit surge pricing during emergencies | The Verge

The taxi app falls in line with numerous laws that consider dynamic pricing during storms to be illegal price gouging Uber is well known for using a dynamic model it calls surge pricing that adjusts the cost of a fare based on supply and demand. The company’s CEO, Travis Kalanick, has defended this practice, saying it puts […]

Should Salespeople Have the Ability to Offer a Discount to Close a Sale? | The Sales Hunter

What is the right level of authority a salesperson should have when it comes to price? This question comes up frequently when I’m meeting with sales managers. What they are wondering is when does it make sense for salespeople to have control of the prices they charge customers and how much flexibility should they have? […]

How Discounting Products Can Hurt Your Business | Agricultural Entrepreneurship

Grocery stores used to offer day old bread at a discounted price but they stopped this practice when they realized that they were losing money from their fresh bread sales. Their customers would continually purchase the day old bread at the discounted price instead of spending more for fresh bread. These stores eventually stopped selling […]

Rising Prices under Declining Preferences – The Case of the U.S. Print Newspaper Industry | Marketing Science Institute

Adithya Pattabhiramaiah, S. Sriram, and Shrihari Sridhar focus on the U.S. print newspaper industry, a quintessential two-sided market, to study how major changes in advertising demand influences prices to readers and advertisers. Online media present major challenges to traditional advertising-supported markets such as print newspapers. Between 2006 and 2011, daily print newspapers lost 20% of […]

Pricing War Games: An Interview with Felix Schuler | Boston Consulting Group

Setting the right price is one of the most critical—yet least understood—elements of sustaining or improving the profitability of a business. Boston Consulting Group pricing expert Amadeus Petzke sat down with BCG colleague Felix Schuler to discuss an initiative he leads that uses “war games” to help clients hone their pricing strategies. The games use […]

Lessons from Netflix and Spotify – how to perfect subscription strategies | TechRadar

So what is a smart pricing strategy for subscription businesses – both in the digital and non-digital worlds? Here’s a handy break-down: Offer a range of price points Let customers choose how much they are prepared to pay by offering a range of price points for differentiated products. This has the combined effect reaching a […]

Setting Product and Pricing Strategy for Your Startup | AlleyWatch

Product and pricing are two of the four big “P’s” from your Marketing 101 class.  Your startup will never succeed if you screw up your product/service offering or pricing strategy. … But, product is only part of the offering; price is the other key driver.  If you are not offering your clients a substantially better value than current […]

Drowning in venture capital, mobile startups are waging unsustainable price wars | PandoDaily

When millions — or even hundred of millions — in venture capital is powering your startup engine, profits are often a distant concern. It’s with this bizarro economic calculus that we stand by and watch an entire sector of on-demand mobile-first startups compete in the kind of price wars that will leave a handful victorious, […]

Is Your Staff Sabotaging Your Pricing Strategy? | Entrepreneur

Sales people often offer discounts before they should–or when they shouldn’t at all. They don’t get the price that a customer is willing to pay because, in their minds, low price is the only tool they have to close the sale. They so fear losing a sale because of price, they negotiate privately with themselves and […]

A cloud startup gets transparent on pricing | GigaOM

Proudly not offering high-volume customer discounts … yet “Actually, one of the interesting things that has come up, as larger customers have approached us, a huge part of the conversation is ‘What kind of a discount can you offer us?’. It’s weird, but I am actually proud to say that, to date, we have not […]

How Museums Can Optimize Revenue Through Dynamic Pricing | Engaging Places

Optimizing revenue by increasing pricing for special exhibits or peak times (e.g. weekends) is widely adopted in the performing arts (e.g., matinee vs evening performances at the theater) but rarely used by museums. A few museums, however, are beginning to experiment with dynamic or demand-based pricing to maximize their revenues. For example, the San […]

Five ways to use psychological pricing | Econsultancy

Psychological pricing is a strategy that retailers can take advantage of, whether they operate online, offline, or in multiple channels. When retailers tap into these pricing tactics, they are able to effectively boost sales and conversions. There are a variety of pricing tricks and tips to entice shoppers to buy, so price intelligently to benefit from this […]

7 Pricing Mistakes That Can Seriously Stifle Sales | HubSpot

When it comes to evaluating price, most of us don’t have a clue what we’re doing. According to Priceless author William Poundstone, much of our strategy boils down to “just winging it,” and that’s not an effective way to do business: “People tend to be clueless about prices. Contrary to economic theory, we don’t really decide between A and B […]

Recommended Resources for Pricing Professionals

Pricer’s Points Blogs

Pricer’s Points: The curious case of doing value based pricing for “commodities” | Jesper Hansson

I hear people use sentences like: “That is a commodity, so the market dictates the price” and “You will only sell commodities if you have the same or lowest price in the market compared to your competitors”. It’s great to get these arguments thrown at you because I like to discuss pricing and it is […]

Pricer’s Points: Why the Amazon Fire Phone price isn’t cheap. | Matt Burnett

It’s been about three-weeks since Amazon unveiled its first smartphone to the world: the Fire Phone. Now the dust has settled it’s possible to try and understand exactly what Amazon is trying to achieve with the Fire Phone pricing. Some commentators have criticised the company for not doing what it’s done in the past with the […]

Pricer’s Points: Pricing maturity and internal control | Jesper Hansson – CPP

We all like to look at companies with our pricing practitioner eyes and try to establish how mature they are in their pricing management processes. There are several different models available today which tries to ‘score’ a company. One of the most frequently used is a 5 step maturity model which goes from a mild […]

Pricing Discussions

Discussion: Four Reasons Why Your Salespeople Discount

Pragmatic Pricing Blog Of course sometimes sales really needs to discount in order to close the deal. If we want the business we need to discount. However, this then becomes an easy excuse for why we discount every deal. If you want to reduce discounting by your sales force, address these four issues: price fairly, […]

Discussion: Uber agrees to new national policy that will limit surge pricing during emergencies

The Verge Article The taxi app falls in line with numerous laws that consider dynamic pricing during storms to be illegal price gouging Uber is well known for using a dynamic model it calls surge pricing that adjusts the cost of a fare based on supply and demand. The company’s CEO, Travis Kalanick, has defended this practice, […]

Discussion: Uber CEO says new feature will tell customers when surge pricing ends

The Verge Article Surge pricing, which raises fares steeply during periods of high demand, has been in place since the service launched but gained renewed attention in late 2013, when prices rose to $35 a mile. Regardless of whether the move was economically sound, it wasn’t popular, and Uber was accused of price gouging. Not long […]

Discussion: Pricing discipline in a complex decentralized organization is a headache

Pricing Strategy & Optimization LinkedIn Group Discussion Local managers may disregard central pricing recommendations. Moreover they may give a lot of latitude to their salesforce. The end result is chaos and far from optimal. All comments welcome! inspire me… Top Comments Wendy Wise High Tech Marketing and Sales Strategist I hear you. Have been there […]

Pricing Quotes and Cartoons


One should always take a little time out to enjoy the lighter side of their profession. Enjoy the following sample from our collection of our favorite pricing related cartoons.

Price Transparency

Dilbert on Price Transparency

Price Wars

Dilbert on Price Wars

Pricing Quotes

One should always take a little time out to enjoy the lighter side of their profession. Enjoy the following sample from our collection of our favorite pricing related quotes.

“Price is what you pay. Value is what you get.”

“The single most important decision in evaluating a business is pricing power”

     – Warren Buffett

“Perhaps the reason price is all your customers care about is because you haven’t given them anything else to care about”

     – Seth Godin

Pricing Resources

Paper: Dynamic Pricing with an Unknown Demand Model – Asymptotically Optimal Semi-Myopic Policies | INFORMS

Abstract We consider a monopolist who sells a set of products over a time horizon of T periods. The seller initially does not know the parameters of the products’ linear demand curve, but can estimate them based on demand observations. We first assume that the seller knows nothing about the parameters of the demand curve, […]

Report: Gartner, MarketScope for Price Optimization and Management Software for B2B: 2013

As Pricing News’ mission is to help find the best resources and information for pricing professionals, click the link above to access a complementary copy of Gartner’s report.

The 2013 MarketScope for PO&M helps clients evaluate vendor software and service offerings, as well as align their price management strategies with the major trends affecting pricing professionals. The findings in the MarketScope are based on primary research conducted by Gartner, client interactions and inquiries on the multiple considerations that are part of developing a PO&M strategy, and Gartner research in technology and business adjacent to price management.

VIDEO: SALES TIP – Number One Way to Avoid a Discount | The Sales Hunter

Do you really believe you can’t sell without a discount? I argue that if you are always defaulting to using a discount, then you are not really selling.  I hear from people all the time who ask me, “How do I sell without discounting?!” You have to stop thinking that your customers are buying, when in reality they […]

The PricingBrew Journal

As Pricing News’ mission is to help find the best resources and information for pricing professionals, we have secured a discount for you – use coupon code “PricingNews” to get one month free on any subscription package to the PricingBrew Journal.

Whether you’re in sales, marketing, product management or a pricing professional, it’s important to stay up-to-date on the latest practices and research in B2B pricing—and get fresh perspectives and ideas that can help make your business (and career) more profitable.

The PricingBrew Journal is the only publication of its kind, providing a regular dose of real-world experience and insight from the PricingBrew research team and a global network of seasoned B2B pricing professionals and consultants. Every two weeks, subscribers get access to in-depth articles, training, research, best practices, case studies, expert interviews and educational webinars.

Click to see what is in the Journal

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Pricing Events

Webcast: Learn How Strategic Pricing Tools Can Help You Increase Prices and Margins Without Losing Sales | SPA

Tuesday, July 15, 2014 2:00 PM Eastern Register to attend our webcast that starts at 2:00 PM EST where an SPA Client will share their journey to pricing excellence and how they are leveraging science-based strategic pricing tools to increase prices and margins without losing sales. To help maximize profits, they turned to SPA to […]

About Pricing News

Pricing News is a sponsor supported organization dedicated to providing free high-value resources to pricing professionals. It is the source for daily and weekly digests of pricing strategy and industry newsevents, thought leadership articlesblogsreportsacademic research, and other resources and special offers. We also share highlights from top pricing discussions and publish articles from pricing practitioners in our Pricer’s Points blog series.

Join the Pricing News LinkedIn group and learn from your pricing peers and industry thought leaders or get your Pricing News on Twitter or Google+.

Until next week,

Matt Balfour

Founder & Managing Director of Pricing News

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