In a time when consumers are resetting their priorities, values and behaviours and raw material/cost prices have fluctuated wildly, it is more important than ever to constantly review your pricing and the results of any pricing actions.
Selling on value, not price, involves a fine balance of confidence, personal rapport, and doing your homework. It's undoubtedly become more difficult as technology gives consumers greater access to price information and insights into what your competitors are up to – but stick with selling value and your prospects in the long term should be brighter.
What is Decoy Pricing?
Welcome to decoy pricing, a tactic that boosts sales of high profit items by creating another version of the product solely to make the pricier versions seem economical by comparison. Decoy pricing "forces" people to compare the pricing options, and as a result sales of the more attractive higher-priced item will increase.
It's pretty obvious that the great British public spend their money in different ways - some people will throw their money around without a care and others save their money like Scrooge. The majority of us come somewhere in the middle. There may well be dozens of different types of buyers depending on how you look at things, but most people whittle them down to just 3.
The Bare Bones
A pricing analyst is a business professional who specializes in the study of pricing, with the aim of determining the best prices for their business. Many companies employ full-time pricing analysts, and it is also possible for a company to hire an analyst as a consultant for a particular project or concern.
In free markets, competition is the norm not the exception, and that competition will limit your latitude for pricing. When competitors lower prices or new competition enters at a lower price, your gut reaction is probably to lower prices too - but the cost of giving price concessions may be higher than the cost of customer losses. Surely there's an easier and less costly way to identify the proper reaction to competitive price moves?