Real-Time Pricing

Description

Change prices by the minute, based on a constantly varying assessment of supply-and-demand and other related factors.

Take account of whether customers actually buy or not after viewing your products. If many of them buy, you can try putting up the price. If many do not, put the price down. You can also vary price based on an assessment of price sensitivity, for example by noting how well dressed the customer is or how hesitant they are in considering buying.

Example

An internet shoe sales company is programmed to take account of weather and vary the price of external footgear accordingly. It also notes the elasticity of demand and will scale back prices if page views are not leading to sales.

A local furniture shop sets discount that salespeople can offer each day based on actual sales across the previous week.

Discussion

This can be a useful strategy when selling on the internet, where prices may vary wildly. To do this properly, you will need an intelligent price-setting system, with access to 'normal' prices. These may be available by scanning competitor sites or subscribing to industry data sources.

An important factor consider is customer perception of fairness. If they think you are taking advantage of them, while you may make a sale now, they may go elsewhere in the future. This will be affected by their knowledge of what the 'normal' price would be.

A way the real price can be cloaked is with a sticker price that is discounted, typically during negotiation or by 'spontaneous' price-reduction that looks like a random act of kindness. Done well, this will result in customers becoming more loyal, more likely to return and more likely to recommend you.

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Real-Time Pricing

Description

Example

Discussion

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Quick links

Disciplines

Techniques

Principles

Explanations

Theories

And