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Key Behavioral Pricing Effects for Portfolio Optimization

W e have put together a selection of the most important behavioral pricing effects. Do you agree with our list? What would you add? Please let us know in the comments. By the way, we have implemented these effects in our SaaS pricing solution, so you can optimize your offer against realistic customer behavior. It is...

buynomics on B2B pricing (part 1 of 4): The Challenge

B 2B pricing is a large field, it deals the pricing towards business customers. Naively, the difference between B2C (business to consumer) and B2B (business to business) is captured in the two pictures in Figure 1. Consumers tend to purchase more spontaneously and emotionally, while businesses’ purchase decisions are more rational and...

Investment strategy concept. Man is playing chess with money.

The power of FREE: How to master the price of zero effect

Key take-aways The price of zero effect is strong Both customers and suppliers can fall for it To make the best use of it, the ability to properly assess its effects in a specific situation is key T he price of zero effect comes from an irrational consumer behavior to prefer less...

The odd price effect

Key take-aways Odd pricing works, but it’s a bit more complicated. Differences in products and cultures matter. The buynomics SaaS solution helps you make best use of odd prices. O dd pricing is a popular marketing technique to create greater consumer demand. The fundamental psychology behind it...

Computer moves in Pricing: How computers price differently from humans

I n chess, a computer move is one that is only made by a computer but not by a human. One of the most famous examples is the 44th move in the first game of the 1997 match between the then World Champion Garry Kasparov and Deep Blue, IBM’s chess machine, when the computer played an apparently random move (Rd1) before resigning. Later,...

Behavioral Pricing 2.0.: How much for the wine?

B ehavioral pricing has long become a part of pricing mainstream, and many experiments and practical examples underline its validity. One prominent example involves two bottles of wine – and a third more expensive bottle that serves as a decoy to affect customers’ preferences of the two other bottles. Figure 1 illustrates the effect....

Use case: Insights@buynomics for pricing consultants

C hallenge Pricing projects start with a pricing audit to evaluate the client’s current pricing. Consultants identify weaknesses in the client’s current pricing, derive improvement levers, and name a few quick wins to sweeten the results. Good pricing audits are a prerequisite for the subsequent improvement of the client’s pricing but...

Pricing SaaS in the 21st century… Chapter 1

L ast summer, we started buynomics with the goal of bringing pricing into the 21st century (see our first blog). Our motivation came from two observations. First, we found that key pricing concepts were designed for simplicity rather than usefulness. For example, capturing market dynamics in a single number, the price elasticity, suits...

The benefits and perils of price differentiation

P rice differentiation – that is, setting different prices for different customers – is typically positioned as one of the silver bullets in the arsenal of the pricing manager. In this blog, we will outline the justification for price differentiation. Moreover, we will show that there is a catch; if price...

Pricing Riddle – Our advice

Last week, we posted the following pricing riddle: Source: https://www.linkedin.com/feed/update/urn:li:activity:6476404627683180544 F irst, we want to thank you for all your considerate and thoughtful answers via comments and private messages to help Tim improve his pricing. We...

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