Smarter Pricing: How to capture more value in your market

Leading customers up price stairways

In price-sensitive markets with a high elasticity, entry prices are crucial in the battle to gain the attention of customers. If the advertised price is not competitive, then the customer rejects this brand and moves to consider other brands. Smarter pricing means headlining a competitive entry price. Once you have the customers’ consideration, you can provide a menu of extras and upgrades that allow them to match their needs for additional services. You create value for different customer types and you are also able to capture the latent value in the market place in the form of higher returns.

An American retailer tested targeted customers with $10 discount voucher when they spent $80 in a single transaction. ...