13 ms·

Pricing Experiments You Can Learn From (2011)

270 points by tekkk 8y ago

aelhaji 8y ago
"Asking people what they’d pay for and how much rarely works." Yes, asking a person about what he or she is willing to pay _hypothetically_ doesn't work. But there are numerous scientific studies that show that using a Vickrey auction, similar to Google's ad auction mechanism, can elicit a person's maximum willingness-to-pay. In fact, it's one of the reasons why William Vickrey won the Nobel Prize in Economic Sciences. The primary reason why you would reveal your maximum willingness-to-pay in a Vickrey auction is because you know beforehand that if you win the auction, you won't have to pay your own bid——you always pay less than your own bid as a winner. How much less is up to the auctioneer but in all cases it's less than your own bid. The pay-what-you-want mechanism cannot reveal how much a person values a product or service because there's such a strong financial incentive to simply state a low amount. Disclaimer: I'm the co-founder of Veylinx, a platform to measure maximum willingness-to-pay of users using Vickrey auctions.
- jasode 8y ago
  >But there are numerous scientific studies that show that using a Vickrey auction, [...], can elicit a person's maximum willingness-to-pay. Yes, but participating in an auction is a concrete action to "commit to pay" -- and therefore not what the author is talking about. The context of the author's quote you extracted ("asking people what they'd pay"†) is about abstract notions of what consumers think they would pay; e.g. gathering hypotheticals of prices from marketing efforts like customer surveys or focus groups. Surveys and focus groups have no real money payment commitments. Auctions do. † author also wrote a few sentences later: "When it comes to money, people are unable to predict accurately whether they’d pay or not. It’s much easier to spend hypothetical dollars than real ones."
  - aelhaji 8y ago
    I agree that skin in the game matters. But my point is a bit more subtle. Imagine the following situation: I present you a new product and I'm going to ask you how much you're willing to pay for it. Let's agree that you'll pay the amount you mention dependent on the flip of a coin. Even though you clearly have have committed to potentially paying real money, this method won't reveal what I really want to know: your true perceived value of the product (maximum willingness-to-pay). The Vickrey auction solves this problem.
    - jakelazaroff 8y ago
      I'm not familiar with Vickrey auctions; can you explain how they solve the problem the author is referring to?
      - rahimnathwani 8y ago
        With eBay proxy bidding, you tell eBay what the maximum is you are willing to pay. Then, if you win the auction, you don't pay your maximum. You pay just above the maximum amount of the bidder you beat (i.e. the person who would have won if you hadn't participated). So, how should you bid if you are a rational person? You should bid the maximum you are willing to pay. As there is zero chance that you will pay more than you needed: you will always pay just enough to beat the second place bidder. So, the incentive is such that you reveal your maximum price to eBay.
        aelhaji 8y ago
        The eBay application isn't really appropriate because eBay always reveals the highest bid, which removes the incentive to reveal if you have a lower willingness-to-pay. A pure application of the Vickrey auction gives all participants an incentive to reveal their maximum willingness-to-pay.
        rahimnathwani 8y ago
        "eBay always reveals the highest bid, which removes the incentive to reveal if you have a lower willingness-to-pay" I don't understand how it removes the incentive? Would you mind going into more detail? (I ask because I believe I am rational when I place eBay bids, and I always choose the actual maximum I'm willing to pay.)
  - clairity 8y ago
    auctions also put up pyschological barriers for some customer segments, so aren't always the best choice. another (classic) alternative is conjoint analysis: https://en.wikipedia.org/wiki/Conjoint_analysis_(marketing) https://en.wikipedia.org/wiki/Conjoint_analysis_(marketing) it's difficult to do well, but will reveal willingness-to-pay without requiring the commitment of real dollars.
- gmiller123456 8y ago
  "But there are numerous scientific studies that show that using a Vickrey auction, similar to Google's ad auction mechanism, can elicit a person's maximum willingness-to-pay." Sounds like a catch-22 situation, how did these studies determine they actually measured a person's maximum willinges-to-pay? Even when a person has decided what their maximum is, there are many known sales tactics that can increase it beyond what the buyer initially decided. Some, like bait-and-switch are so effective that they're outlawed. So, it'd be really interesting to hear how these studies actually determined they actually measured what they said they did.
  - aelhaji 8y ago
    It's done with so-called value induced auctions. In this type of auction you simply bid on a voucher that's worth $x dollars, where x is different for each participant. Theory predicts that your bid should be $x (your maximum willingness-to-pay). Considering value is induced, researchers know both the prediction and the observation, and calculating the difference determines the 'truth revealing efficiency' of an auction. See for example: https://www.sciencedirect.com/science/article/pii/S0167268101001652 https://www.sciencedirect.com/science/article/pii/S016726810...
polysaturate 8y ago
I feel like this is the same general pricing experiments/info we have seen synthesized for the past few years in giant articles. I was hoping there were some new juicy SaaS pricing experiences to be shared. Not that the information in this article is bad if you haven't seen it before or haven't fiddled with pricing in a while
baby 8y ago
I remember reading that article about having three variants of a product. I think it was something like that: 1. one really cheap but bad 2. one better but much more expensive 3. one even better, and more expensive Since for most people, the middle option (2) made more sense than the cheap one (1), they would all buy the last option (3) because for a bit more money you had something better than 2. Apple seems to be using a similar strategy with very limited capacities for their first option, which makes most people buy the more expensive option to have more capacity. From there it's easy to jump to more expensive stuff, or to add options and accessories.
- gav 8y ago
  This is price bracketing, which is a form of anchoring. The idea is that if you had two items, one for $10 and one for $40, adding a $200 item is going to increase sales of the $40 because it makes it seem more reasonable in comparison. It's not going to push a lot of people to the higher-priced item. The Apple example I like is the iPad. It's priced against both the 512gb version (+$350) and the Wifi+Cellular (+$130) so you think that the $649 version is a bargain against $1129 and you don't compare it against the Amazon Fire at $49.99.
  - lotsofpulp 8y ago
    An iPad wouldn’t be compared to an Amazon Fire because they aren’t comparable products. If you value iOS, Facetime, iMessage, and Apple’s general product experience, then others would also have to provide a similar experience to be comparable.
    - k__ 8y ago
      Most people I know watch videos and read books on their tablets, which works equally well on an iPad as on a Fire HD.
      - lotsofpulp 8y ago
        Most people I know FaceTime...every single older person in my extended family. It would be useless without them being able to Facetime with their grandkids.
superasn 8y ago
This is the worst most distracting website to ever exist. As soon as I start reading a line something pops up (first a man, then another popup at bottom then sharing buttons covering up more screen). Why do you do this :(
- DisruptiveDave 8y ago
  Likely because it works in some capacity.
- xenospn 8y ago
  Reader view on Safari.
- QuantumGood 8y ago
  https://outline.com/4AgPdu https://outline.com/4AgPdu
- jaworrom 8y ago
  And yet, they are responsible for millions in extra top-line revenue for massive companies. These guys are good at what they do :)
willart4food 8y ago
TIL: People are weird and irrational, and there’s much we don’t understand. Like why do shoppers moving in a counterclockwise direction spend on average $2.00 more at the supermarket?
- Lordarminius 8y ago
  Counterclockwise is an anti-pattern (at least for me), my guess is that it makes shoppers move more slowly, pay more attention to displayed items and spend more time at the shop.
  - gowld 8y ago
    Right-handed people, with their bias toward turning right, tend to walk anti-clockwise when entering a loop from the outside (such as grocery stores), and clockwise when entering from the inside. https://science.howstuffworks.com/life/inside-the-mind/human-brain/predictable-walking-patterns-counter-clockwise.htm https://science.howstuffworks.com/life/inside-the-mind/human... People who travel anti-clockwise see more stuff, because if they travel clockwise, then they'll turn right and toward the front/exit before they finish a complete loop around the store.
- dhimes 8y ago
  Anti-clockwise is the mathematically positive direction. Also, NASCAR. Confusing to those who navigate by compass, though. OT amusement: After school and teaching and spending half a career so-encumbered, I took up boating and took a marine navigation course. At first it drove me crazy because all of their + and - direction changes were backwards and I was screwing them up.
- laughinghan 8y ago
  Only in the Northern hemisphere. In the Southern hemisphere, shoppers moving in the clockwise direction spend more money, due to the Coriolis effect.
- seanwilson 8y ago
  Have you got a link to the study about this? To be honest, I feel a lot of these claims are like nutritional studies, where when you look into it the original study wasn't great or are for highly specific scenarios but the general claim will be spread for decades anyway. For this one for instance, what was being bought? How expensive? How did the prices vary? What about shelf positions? Who were the customers? How many customers? How were they made to pick a direction? How long were they shopping for? What factors were and weren't controlled for? Usually when the controls aren't great, you find that further studies that improve on the controls lead to the measured effect size getting smaller and smaller. Maybe not the case here, I don't know, but I'm very skeptical about general claims that sound hard to measure.
Townley 8y ago
I sense an upcoming reckoning against these techniques. Big "SALE!" signs and prices ending in 9 aren't benign: they're malevolent attempts at psychological manipulation, and they degrade consumer trust the minute customers recognize them as such. While it's likely impossible to fully counter the bias, I've started clutching my purse strings more tightly since those big glowing signs became less of a declaration of value, and more of a warning that "We don't have your best interests at heart" These techniques work, but only because people view this manipulation as acceptable and commonplace. It would do wonders for consumer confidence (and therefore sales) if stores could give a credible and transparent promise that they make every attempt to inform consumers about the value of their products. Shoppers like myself (busy, uninformed about most categories of things they buy, and unconfident that they can navigate the "DEALS" landscape and come out ahead) would not only shop there: they'd pay a premium to do so.
- Nadya 8y ago
  >Big "SALE!" signs and prices ending in 9 aren't benign: they're malevolent attempts at psychological manipulation, and they degrade consumer trust the minute customers recognize them as such. While it's likely impossible to fully counter the bias, I've started clutching my purse strings more tightly since those big glowing signs became less of a declaration of value, and more of a warning that "We don't have your best interests at heart" You won't see this - someone has already tried before it and it nearly financially ruined the company. The sad thing is it works and people are easily manipulated. Ron Johnson (former CEO of JC Penney) nearly bankrupted JC Penney with his "fair and square" pricing. Consumers are so used to being manipulated by fake sales and xx.99 pricing that having merchandise advertised without any gimmicks actually results in worse sales. [0] I'm hoping one day people will turn around and be against being psychologically manipulated, but I don't see it happening anytime soon. After all, many people still defend advertisements. A socially accepted form of psychological manipulation that is intended to make you feel worse about yourself and your life unless you buy <product> because <product> will make you happier. The fact people are okay with ads in any context completely baffles me. There are people who are totally fine with being emotionally and psychologically manipulated in return for something being "free". To the point where people in western cultures associate the colors red and yellow with food and don't question why. [0] https://www.cbc.ca/radio/undertheinfluence/the-real-reason-most-prices-end-in-99-cents-1.4731238 https://www.cbc.ca/radio/undertheinfluence/the-real-reason-m...
dang 8y ago
2012: https://news.ycombinator.com/item?id=4370904 https://news.ycombinator.com/item?id=4370904 2013: https://news.ycombinator.com/item?id=5435862 https://news.ycombinator.com/item?id=5435862
gambler 8y ago
The notion that you must be good at selling shit is reinforced in most companies, colleges and probably schools. The idea that choosing products and making correct economic decisions is a skill - this idea is formally taught almost nowhere. Is there any surprise that manipulative techniques work so well? If you think this is driven purely by self-interest of companies, you're probably wrong. Employees in most big corps waste immeasurable amounts of resources on "internal marketing" (from resumes during hire, to presentations, to emails sent to their bosses). Most big companies still believe it's better train 100 workers to sell their shit, than to train 1 VP to use basic math and critical thinking. Similar situation with resumes. HR bemoans people lying on their resumes, and then do absolutely everything possible to incentivize applicant to lie as much as possible. Heck, even here. Where are the articles titled "here is how I rationalized my shopping"?
- gambler 8y ago
  As far as pricing, I think one way to combat the manipulation is to put prices on your shopping list and never buy anything just because it's cheap, unless it's already on your list. Another strategy is to ignore prices altogether and just skip items that are too expensive before the final checkout.
hcal 8y ago
I would love to see recommendations for articles like this but for b2b pricing. I suspect there are better ways to price professional buyers.
elchief 8y ago
Data Scientist / MBA Marketing here There's a difference between "how much would you pay for X?" versus "would you pay N for X? How about M for X?" You can also conduct a Discrete Choice experiment, asking respondents to choose between priced bundles (repetitively) to estimate the value of each component
vaporwear 8y ago
Can this dude have any more ads and pop ups on the page?
lscotte 8y ago
Forced pricing is exactly why theaters sell 3 sizes of popcorn, with large "only being 25 cents more than medium. The goal isn't to get you to buy the large, it's to get you not to buy the small. There was a book I read years ago about this sort of psychology and food, but I can't recall the title.
tapland 8y ago
He lets a lot of weird behavior slide. Like this one: "Under the simple pay-what-you-wish variation, 8.39% of people purchased a photo (almost 17 times more than before), but customers paid only $.92 on average. The final option — pay what you wish, with half the purchase price going to charity — generated big results: purchase rates of 4.49% and an average purchase price of $5.33, resulting in significant profits for the theme park. This is a substantial result, especially since it came from a real setting." Why does pay what you wish with half going to charity slash sales in half compared to standard pay as you wish?
- daxterspeed 8y ago
  A simple guess would be that people feel comfortable low balling the theme park but not the charity, even if any amount would help.
JackPoach 8y ago
I really dislike this type of articles, because for any such statements to be true, they have to be replicated by different vendors on multiple occasions. When one vendor does one thing and gets a result once, it does not mean that this is a pattern than can be exploited.

270 points by tekkk 8y ago

"Asking people what they’d pay for and how much rarely works." Yes, asking a person about what he or she is willing to pay _hypothetically_ doesn't work. But there are numerous scientific studies that show that using a Vickrey auction, similar to Google's ad auction mechanism, can elicit a person's maximum willingness-to-pay. In fact, it's one of the reasons why William Vickrey won the Nobel Prize in Economic Sciences. The primary reason why you would reveal your maximum willingness-to-pay in a Vickrey auction is because you know beforehand that if you win the auction, you won't have to pay your own bid——you always pay less than your own bid as a winner. How much less is up to the auctioneer but in all cases it's less than your own bid. The pay-what-you-want mechanism cannot reveal how much a person values a product or service because there's such a strong financial incentive to simply state a low amount. Disclaimer: I'm the co-founder of Veylinx, a platform to measure maximum willingness-to-pay of users using Vickrey auctions.

jasode 8y ago
>But there are numerous scientific studies that show that using a Vickrey auction, [...], can elicit a person's maximum willingness-to-pay. Yes, but participating in an auction is a concrete action to "commit to pay" -- and therefore not what the author is talking about. The context of the author's quote you extracted ("asking people what they'd pay"†) is about abstract notions of what consumers think they would pay; e.g. gathering hypotheticals of prices from marketing efforts like customer surveys or focus groups. Surveys and focus groups have no real money payment commitments. Auctions do. † author also wrote a few sentences later: "When it comes to money, people are unable to predict accurately whether they’d pay or not. It’s much easier to spend hypothetical dollars than real ones."
- aelhaji 8y ago
  I agree that skin in the game matters. But my point is a bit more subtle. Imagine the following situation: I present you a new product and I'm going to ask you how much you're willing to pay for it. Let's agree that you'll pay the amount you mention dependent on the flip of a coin. Even though you clearly have have committed to potentially paying real money, this method won't reveal what I really want to know: your true perceived value of the product (maximum willingness-to-pay). The Vickrey auction solves this problem.
  - jakelazaroff 8y ago
    I'm not familiar with Vickrey auctions; can you explain how they solve the problem the author is referring to?
    - rahimnathwani 8y ago
      With eBay proxy bidding, you tell eBay what the maximum is you are willing to pay. Then, if you win the auction, you don't pay your maximum. You pay just above the maximum amount of the bidder you beat (i.e. the person who would have won if you hadn't participated). So, how should you bid if you are a rational person? You should bid the maximum you are willing to pay. As there is zero chance that you will pay more than you needed: you will always pay just enough to beat the second place bidder. So, the incentive is such that you reveal your maximum price to eBay.
      - aelhaji 8y ago
        The eBay application isn't really appropriate because eBay always reveals the highest bid, which removes the incentive to reveal if you have a lower willingness-to-pay. A pure application of the Vickrey auction gives all participants an incentive to reveal their maximum willingness-to-pay.
        rahimnathwani 8y ago
        "eBay always reveals the highest bid, which removes the incentive to reveal if you have a lower willingness-to-pay" I don't understand how it removes the incentive? Would you mind going into more detail? (I ask because I believe I am rational when I place eBay bids, and I always choose the actual maximum I'm willing to pay.)
- clairity 8y ago
  auctions also put up pyschological barriers for some customer segments, so aren't always the best choice. another (classic) alternative is conjoint analysis: https://en.wikipedia.org/wiki/Conjoint_analysis_(marketing) https://en.wikipedia.org/wiki/Conjoint_analysis_(marketing) it's difficult to do well, but will reveal willingness-to-pay without requiring the commitment of real dollars.
gmiller123456 8y ago
"But there are numerous scientific studies that show that using a Vickrey auction, similar to Google's ad auction mechanism, can elicit a person's maximum willingness-to-pay." Sounds like a catch-22 situation, how did these studies determine they actually measured a person's maximum willinges-to-pay? Even when a person has decided what their maximum is, there are many known sales tactics that can increase it beyond what the buyer initially decided. Some, like bait-and-switch are so effective that they're outlawed. So, it'd be really interesting to hear how these studies actually determined they actually measured what they said they did.
- aelhaji 8y ago
  It's done with so-called value induced auctions. In this type of auction you simply bid on a voucher that's worth $x dollars, where x is different for each participant. Theory predicts that your bid should be $x (your maximum willingness-to-pay). Considering value is induced, researchers know both the prediction and the observation, and calculating the difference determines the 'truth revealing efficiency' of an auction. See for example: https://www.sciencedirect.com/science/article/pii/S0167268101001652 https://www.sciencedirect.com/science/article/pii/S016726810...

polysaturate 8y ago

I feel like this is the same general pricing experiments/info we have seen synthesized for the past few years in giant articles. I was hoping there were some new juicy SaaS pricing experiences to be shared. Not that the information in this article is bad if you haven't seen it before or haven't fiddled with pricing in a while

baby 8y ago

I remember reading that article about having three variants of a product. I think it was something like that: 1. one really cheap but bad 2. one better but much more expensive 3. one even better, and more expensive Since for most people, the middle option (2) made more sense than the cheap one (1), they would all buy the last option (3) because for a bit more money you had something better than 2. Apple seems to be using a similar strategy with very limited capacities for their first option, which makes most people buy the more expensive option to have more capacity. From there it's easy to jump to more expensive stuff, or to add options and accessories.

gav 8y ago
This is price bracketing, which is a form of anchoring. The idea is that if you had two items, one for $10 and one for $40, adding a $200 item is going to increase sales of the $40 because it makes it seem more reasonable in comparison. It's not going to push a lot of people to the higher-priced item. The Apple example I like is the iPad. It's priced against both the 512gb version (+$350) and the Wifi+Cellular (+$130) so you think that the $649 version is a bargain against $1129 and you don't compare it against the Amazon Fire at $49.99.
- lotsofpulp 8y ago
  An iPad wouldn’t be compared to an Amazon Fire because they aren’t comparable products. If you value iOS, Facetime, iMessage, and Apple’s general product experience, then others would also have to provide a similar experience to be comparable.
  - k__ 8y ago
    Most people I know watch videos and read books on their tablets, which works equally well on an iPad as on a Fire HD.
    - lotsofpulp 8y ago
      Most people I know FaceTime...every single older person in my extended family. It would be useless without them being able to Facetime with their grandkids.

superasn 8y ago

This is the worst most distracting website to ever exist. As soon as I start reading a line something pops up (first a man, then another popup at bottom then sharing buttons covering up more screen). Why do you do this :(

DisruptiveDave 8y ago
Likely because it works in some capacity.
xenospn 8y ago
Reader view on Safari.
QuantumGood 8y ago
https://outline.com/4AgPdu https://outline.com/4AgPdu
jaworrom 8y ago
And yet, they are responsible for millions in extra top-line revenue for massive companies. These guys are good at what they do :)

willart4food 8y ago

TIL: People are weird and irrational, and there’s much we don’t understand. Like why do shoppers moving in a counterclockwise direction spend on average $2.00 more at the supermarket?

Lordarminius 8y ago
Counterclockwise is an anti-pattern (at least for me), my guess is that it makes shoppers move more slowly, pay more attention to displayed items and spend more time at the shop.
- gowld 8y ago
  Right-handed people, with their bias toward turning right, tend to walk anti-clockwise when entering a loop from the outside (such as grocery stores), and clockwise when entering from the inside. https://science.howstuffworks.com/life/inside-the-mind/human-brain/predictable-walking-patterns-counter-clockwise.htm https://science.howstuffworks.com/life/inside-the-mind/human... People who travel anti-clockwise see more stuff, because if they travel clockwise, then they'll turn right and toward the front/exit before they finish a complete loop around the store.
dhimes 8y ago
Anti-clockwise is the mathematically positive direction. Also, NASCAR. Confusing to those who navigate by compass, though. OT amusement: After school and teaching and spending half a career so-encumbered, I took up boating and took a marine navigation course. At first it drove me crazy because all of their + and - direction changes were backwards and I was screwing them up.
laughinghan 8y ago
Only in the Northern hemisphere. In the Southern hemisphere, shoppers moving in the clockwise direction spend more money, due to the Coriolis effect.
seanwilson 8y ago
Have you got a link to the study about this? To be honest, I feel a lot of these claims are like nutritional studies, where when you look into it the original study wasn't great or are for highly specific scenarios but the general claim will be spread for decades anyway. For this one for instance, what was being bought? How expensive? How did the prices vary? What about shelf positions? Who were the customers? How many customers? How were they made to pick a direction? How long were they shopping for? What factors were and weren't controlled for? Usually when the controls aren't great, you find that further studies that improve on the controls lead to the measured effect size getting smaller and smaller. Maybe not the case here, I don't know, but I'm very skeptical about general claims that sound hard to measure.

Townley 8y ago

I sense an upcoming reckoning against these techniques. Big "SALE!" signs and prices ending in 9 aren't benign: they're malevolent attempts at psychological manipulation, and they degrade consumer trust the minute customers recognize them as such. While it's likely impossible to fully counter the bias, I've started clutching my purse strings more tightly since those big glowing signs became less of a declaration of value, and more of a warning that "We don't have your best interests at heart" These techniques work, but only because people view this manipulation as acceptable and commonplace. It would do wonders for consumer confidence (and therefore sales) if stores could give a credible and transparent promise that they make every attempt to inform consumers about the value of their products. Shoppers like myself (busy, uninformed about most categories of things they buy, and unconfident that they can navigate the "DEALS" landscape and come out ahead) would not only shop there: they'd pay a premium to do so.

Nadya 8y ago
>Big "SALE!" signs and prices ending in 9 aren't benign: they're malevolent attempts at psychological manipulation, and they degrade consumer trust the minute customers recognize them as such. While it's likely impossible to fully counter the bias, I've started clutching my purse strings more tightly since those big glowing signs became less of a declaration of value, and more of a warning that "We don't have your best interests at heart" You won't see this - someone has already tried before it and it nearly financially ruined the company. The sad thing is it works and people are easily manipulated. Ron Johnson (former CEO of JC Penney) nearly bankrupted JC Penney with his "fair and square" pricing. Consumers are so used to being manipulated by fake sales and xx.99 pricing that having merchandise advertised without any gimmicks actually results in worse sales. [0] I'm hoping one day people will turn around and be against being psychologically manipulated, but I don't see it happening anytime soon. After all, many people still defend advertisements. A socially accepted form of psychological manipulation that is intended to make you feel worse about yourself and your life unless you buy <product> because <product> will make you happier. The fact people are okay with ads in any context completely baffles me. There are people who are totally fine with being emotionally and psychologically manipulated in return for something being "free". To the point where people in western cultures associate the colors red and yellow with food and don't question why. [0] https://www.cbc.ca/radio/undertheinfluence/the-real-reason-most-prices-end-in-99-cents-1.4731238 https://www.cbc.ca/radio/undertheinfluence/the-real-reason-m...

dang 8y ago

2012: https://news.ycombinator.com/item?id=4370904 https://news.ycombinator.com/item?id=4370904 2013: https://news.ycombinator.com/item?id=5435862 https://news.ycombinator.com/item?id=5435862

gambler 8y ago

The notion that you must be good at selling shit is reinforced in most companies, colleges and probably schools. The idea that choosing products and making correct economic decisions is a skill - this idea is formally taught almost nowhere. Is there any surprise that manipulative techniques work so well? If you think this is driven purely by self-interest of companies, you're probably wrong. Employees in most big corps waste immeasurable amounts of resources on "internal marketing" (from resumes during hire, to presentations, to emails sent to their bosses). Most big companies still believe it's better train 100 workers to sell their shit, than to train 1 VP to use basic math and critical thinking. Similar situation with resumes. HR bemoans people lying on their resumes, and then do absolutely everything possible to incentivize applicant to lie as much as possible. Heck, even here. Where are the articles titled "here is how I rationalized my shopping"?

gambler 8y ago
As far as pricing, I think one way to combat the manipulation is to put prices on your shopping list and never buy anything just because it's cheap, unless it's already on your list. Another strategy is to ignore prices altogether and just skip items that are too expensive before the final checkout.

hcal 8y ago

I would love to see recommendations for articles like this but for b2b pricing. I suspect there are better ways to price professional buyers.

elchief 8y ago

Data Scientist / MBA Marketing here There's a difference between "how much would you pay for X?" versus "would you pay N for X? How about M for X?" You can also conduct a Discrete Choice experiment, asking respondents to choose between priced bundles (repetitively) to estimate the value of each component

vaporwear 8y ago

Can this dude have any more ads and pop ups on the page?

lscotte 8y ago

Forced pricing is exactly why theaters sell 3 sizes of popcorn, with large "only being 25 cents more than medium. The goal isn't to get you to buy the large, it's to get you not to buy the small. There was a book I read years ago about this sort of psychology and food, but I can't recall the title.

tapland 8y ago

He lets a lot of weird behavior slide. Like this one: "Under the simple pay-what-you-wish variation, 8.39% of people purchased a photo (almost 17 times more than before), but customers paid only $.92 on average. The final option — pay what you wish, with half the purchase price going to charity — generated big results: purchase rates of 4.49% and an average purchase price of $5.33, resulting in significant profits for the theme park. This is a substantial result, especially since it came from a real setting." Why does pay what you wish with half going to charity slash sales in half compared to standard pay as you wish?

daxterspeed 8y ago
A simple guess would be that people feel comfortable low balling the theme park but not the charity, even if any amount would help.

JackPoach 8y ago

I really dislike this type of articles, because for any such statements to be true, they have to be replicated by different vendors on multiple occasions. When one vendor does one thing and gets a result once, it does not mean that this is a pattern than can be exploited.