Smarter Pricing: How to capture more value in your market

Early payment, less commitment

Timing of payment is another factor that impacts on awareness of the amount paid and hence determination to consume the product or service. Payment at or near the time of consumption increases attention to the product’s cost, raising the likelihood that the product will be consumed and not wasted. Gourville and Soman (2002) say that season ticket holders will be less diligent in attending events than buyers paying shortly before the event. The further ahead in time you pay for an event ticket, statistically, the greater the probability of failure to attend. This knowledge can be used in yield management, by forecasting attendance, assessing support staff numbers and, perhaps, by overselling to balance the no-show ...