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Latest Pricing Insights

Are Your Customers Willing to Pay More?

Posted by PriceBeam on April 4, 2018

 

Take the Guesswork out of Pricing

Do you have the right price for existing products or services? Do you know what the price should be for a new product yet to be launched? Are your customers willing to pay more for a given set of benefits? If you measure willingness-to-pay scientifically you will be able to answer all of those questions. Yet, still 88% of all companies admit that their pricing process is at least in part based on guesswork, without knowing what customers value and how much they are willing to pay for an overall product, or for a given set of features.

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Topics: value-based pricing, price research, price increase, pricing research

Why Willingness-to-Pay is a Local Thing

Posted by PriceBeam on April 3, 2018

International willingness-to-pay

Value-based pricing requires data and insights. Without understanding what customers value, or are willing to pay, it very easily ends up being just a more sophisticated version of guesswork. Leading companies applying value-based pricing fully understand this. But there is still a trap when it comes to the willingness-to-pay data collected: because market research used to be expensive there could be a tendency to either skip some markets or generalising results from one key market to all other markets.

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Topics: willingness to pay, globalization, pricing research

7 Factors to Include in Your Dynamic Pricing Model When Pricing Perishable Goods

Posted by PriceBeam on March 20, 2018

Perishable goods exist in many forms and situations. There is of course food products that have an expiry date after which they should not be sold. But also event or sports tickets, airline tickets and many other types of businesses. They all have in common that after a certain date the product or service cannot be sold any longer.

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Topics: willingness to pay, pricing research, dynamic pricing

Using Segmentation to get Higher Prices

Posted by PriceBeam on March 8, 2018

We all know the feeling: what matters to us when buying something is not necessarily the same as what our partners, friends, colleagues or even total strangers emphasize when looking for the same product. Customers and consumers are not all alike. What value we get from a product is unique to us. While this is old wisdom, we still see that many businesses still take the same price across all customers.

If someone is willing to pay more for a product or service, because she gets more value out of than the other person, then why not find a way to charge such a higher price? It is true that in some countries, price discrimination where you charge different prices to different customers for the exact same product is illegal. But charging different prices for products that are also differentiated according to the value they bring, is always legal. If a (slightly) different delivery of product results in increased value and therefore willingness-to-pay, then go for it. After all, it is better if some customers pay $50 and others $70, than all paying $50.

The approach to achieve higher and more accurate pricing against what individuals are willing to pay is focused on segmentation. Customer segmentation and sometimes product segmentation.

Take an example from the chart below. In this case a software company was selling a software package at $199 to all their clients. Through segmentation they were able to identify that they had several customer segments, for whom different features mattered: some would really only care about getting a good and low price (the "Price Segment" below) and others would focus on being able to customize the software extensively (the "Customizer" segment in the chart).

 

The chart shows two willingness-to-pay curves collected by using PriceBeam's research solution to ask questions about willingness-to-pay by segment. As you can see, the outcome was that the Price Segment customers have an optimal price point at $199. But the Customizer Segment customers are actually willing to pay a considerably higher price on average, fully $499. 

So what the software company did in this case, was to create two versions of the software. One targeting the Price Segment customers, with a certain set of base features and the all-important low(ish) price of $199. A different version had a number of customization features enabled and was then sold at $499. The outcome: where all sale before was at $199, now a part was still sold at $199 (but at a reduced feature set) and the rest sold at $499, resulting in a higher overall revenue and profitability.

PriceBeam's price research solution can deliver insights like the ones above in a very short time frame and will typically deliver ROIs in thousands of percent in just the first weeks/months. Get in touch or sign up for a free trial on our website.

 

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Topics: pricing research, segmentation, price positioning

Still Time to Sign Up: Webinar about Supporting Value-Based Pricing Strategies with Pricing Research

Posted by PriceBeam on February 22, 2018

On Monday the 26th, our co-founder Finn Helmo Hansen is conducting a webinar about how to use price research when establishing, implementing and maintaining a value-based pricing strategy. 

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Topics: value-based pricing, price research, pricing research

PriceBeam is growing: Getting scientific pricing insights in 109 countries

Posted by PriceBeam on February 22, 2018

We are excited to announce that PriceBeam's pricing research is now available for 109 different countries around the world:

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Topics: globalization, price research, ecommerce, pricing research

5 Steps to Getting a Better Price for a New Product

Posted by Finn Helmo on February 21, 2018

Launching a new product, whether you are in a startup or a well-established corporate environment, can be a daunting task. Everything from product development to marketing materials, sales training, customer communication and pricing comes in play. One of the biggest determinators of success is getting pricing right: price too low and the profitability is broken, plus it is almost impossible to later increase the price (substantially). Launch at too high a price and you may not sell enough to get off the ground.

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Topics: new product pricing, globalization, price research, price communication, pricing research