Top 6 – May 2014
Published May 5, 2014
“The brain is wider than the sky.” -Emily Dickinson
- Psychological pricing is effective. Even the most cautious brains take mental shortcuts to drive efficient decision-making.
- That said, the Internet allows a large number of careful consumers to compare notes, so be aware of customer scrutiny when you drastically change your pricing or bundling system.
- You can accumulate as much knowledge and brain-power as you’d like—at the end of the day, if your customers aren’t on board, your ship is sailing toward oblivion.
- Psychological tactics are a part of your arsenal, but aren’t your bread-and-butter pricing moves.
- Communication with customers happens in a number of ways, and large rebranding/price change decisions should be thoroughly vetted through your profit base (your best customers).
- Your customers can, and will, do the math to get the most out of the products or services you provide. And you should welcome this: they’re putting the food on your table—you should want them to want to keep doing so.
About The Author
Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.