Category Archives: Price Segmentation

3 Important Price Optimization Lessons You Might Learn In The Strangest Places: Ask Mark Stiving

Buried at the end of Mark Stiving’s presentation at the Professional Pricing Society meeting in Las Vegas is a “priceless” example (video) of how Mark learned about the principles of pricing from a hooker he met while walking to his hotel. No, it’s not what you think. Stiving asked the woman a few questions about her business and found out how much...
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How Using New Consumer Shopping Metrics Mean Bigger Sales & Profits For Retailers (Video)

In this Forbes Video Network, Intelligent Technology segment, “Tracking the customer’s behavior,” Dan Fishback of Demandtec (a research firm helping retailers define merchandising and marketing strategies based on scientific understanding of shopper behavior) talks about the “new metrics” of understanding how consumers shop across channels and cre...
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The Surprising Secret to Successful Price Segmentation

Guest blogger, pricing expert and author, Mark Stiving, wrote a great post for Upstream Commerce a few days ago on How to Get Your Customers to Like Price Segmentation. Mark highlighted how price segmentation can cause more trouble than it’s worth for retailers, and discussed ways to avoid the downsides while holding onto the additional profit. ...
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The Future Of Retail: 20 Key Retailing Trends, With Dr. Patrick Dixon (Video)

The key premise by Futurist, Patrick Dixon, speaking to a UK audience on The Future of Retail, is that it’s not about science or data; i.e. what changes is not the facts, but how people feel. The future is more than consumer research, Dixon says. What’s important for the future is how to get into the emotions of our customers, how to understand how ...
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How To Get Your Customers To Like Price Segmentation

Can you charge individual customers different prices? Are you doing it? The secret is to do it in a way that they’ll like and appreciate. In 2000, Amazon.com famously did some price testing that caused customers to be quoted different prices for the same product — and got in trouble for it. Jeff Bezos, the CEO of Amazon, claimed it was “random pric...
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How Retailers Can Increase Sales & Profits As Much as 33% Using Technology & Data Analysis: VIDEO

“The era of analytics for retailing has arrived,” says Marshall Fisher, UPS Professor of Operations and Information Management at the Wharton School of the University of Pennsylvania. “It’s not just a question of having the information, but knowing what to do with it.” (I recently blogged on one aspect of this: 7 Reasons Why Trusting Your Gut Isn...
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Should Retailers Price for Loyalty or Price By Willingness to Pay? The Contradiction

When it comes to competitive pricing, value-based pricing maximizes your profits. At its simplest this means charge what your customers are willing to Pay (WTP). When you have the ability to charge different prices to different customers, charge more to the ones with higher WTP. We’ve discussed this as price segmentation in recent articles. What...
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5 Ways Retailers Can look Inside Themselves To Get Pricing and Profit Right: Part 2 of Pricing, The Enemy Within

In my recent blog post, “5 Ways Retailers Sabotage Their Own Pricing and Profit: The Enemy Within, Part 1“, I described that a one percent price increase can boost a company’s operating profits by 11.1 percent – much more than the profitability increase a company can expect from a one percent overall reduction in variable costs (7.8 percent), a...
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How To Use Price Segmentation To Capture Customers At Entry-Level, And Make More Profit At High-Performance Level

Last month, we discussed price segmentation and how to charge different customers different prices based on customer characteristics, their behaviors, and transaction characteristics. These are all techniques on how to charge different prices for the same product. This month, let’s look at the most powerful price segmentation tool of all, your pr...
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4 Proven Techniques Using Price Segmentation To Maximize Profits

You know you can make more money when you can charge different prices to different customers. This is price segmentation as discussed in my previous blog post, “How To Use Price Segmentation To Maximize Retail Profits.” The ultimate goal is to charge each customer whatever he or she is willing to pay. Of course this isn’t always possible, but he...
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6 Ways To Use “Big Data” To Increase Operating Margins By 60% – Part 2

In my recent post, “Why Harnessing ‘Big Data’ Is The Next Big Thing in eCommerce (Part 1)”,  I talked about extraordinary opportunities coming with “Big Data” —  or “the drift toward data-driven discovery and decision-making,” as the New York Times calls it. In Part 1, I talked about the implications and insights of harnessing “Bi...
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How To Use Price Segmentation To Maximize Retail Profits

No two customers have the exact same Willingness to Pay (WTP) — and your objective should be to capture as much of each of your customer’s WTP as possible, while still winning the business.  So do you charge different prices to different customers???  I hope so!!!  (This is price segmentation).   Imagine two customers, Mr. Rich and Mr. Mid...
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