It's a fact that no two customers have the same Willingness to Pay, but you naturally want to capture as much of each of your customer's Willingness to Pay as possible. The answer could be to charge different prices to different customers – known as price segmentation or price differentiation.
Price discrimination is a pricing strategy that charges customers different prices for identical goods or services according to certain criteria. In pure price discrimination, the seller/provider will charge each customer the maximum price they are willing to pay. In more common forms of price discrimination, the seller places customers in groups based on certain attributes and charges each group a different price.
Are your customers suffering from price tag shock?
Is price sensitivity hurting your sales?
Are your customers rejecting your product or service?
Do you know why this is happening?
Do you really know your niche and your customers?
However great your product, if it's not selling there's likely to be an issue with price sensitivity - and if any or all of the questions above are familiar to you or your business you might need to reflect long and hard on this thorny issue– and how you can more easily convince your customers to part with their cash.
Topics: Pricing Elasticity