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Do not talk about pricing

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Re: Do not talk about pricing

#21

Post by crazy1van »

orangecat wrote: post #16
LoSboccacc wrote: post #15

Earlier quoted context omitted.

If anything peolpe are afraid to explore the curve to find maximum profit. Starting high and giving out discoubts at various level trough the year can help building a model and set the best price if it's not overdone (as in, customer expecting continual discounts)

if it's not overdone (as in, customer expecting continual discounts) I'm still surprised that Steam has so many discounts; they've basically trained me to never pay full price. But I feel no need to play new games right when they're released; maybe there are enough people that do.

They've also trained me to buy a whole bunch of games just because they are massively on sale even though I'll probably never play them. I guess Valve figures this works out better for them overall.

Re: Do not talk about pricing

#22

Post by boulos »

tedmiston wrote: post #18

Just me or does anyone else only picture The New York Times when you hear "The Times"? Is that just me? Or just an American thing?

Don't feel bad, it's a regional thing. In San Francisco, if someone says "The Times" I also assume NYT. But, for example, folks nearer LA, think the LA Times. A lab mate and I joked about making a visualization along these lines (and the more common "Which city is 'The City'?").

Now I'm curious if the Seattle Times is a big enough deal to supplant NYT (presumably yes)...

Re: Do not talk about pricing

#24

Post by boulos »

While I think this is fine advice for most consumer things (and that generally you should talk about value not price), this falls down in a number of interesting markets. For example, with cloud where I work, the pricing is a huge component of decision making. Many organizations base their decisions on TCO, and that's not crazy. Generally speaking, if you have a commodity (or near commodity) then price is something to talk about.

Re: Do not talk about pricing

#25

Post by boulos »

clarkmoody wrote: post #12

The phenomenon is called anchoring[1], and it works like this: the first price we see anchors our thinking about additional information. This is why furniture stores have a perpetual sale. "Oh look, this $2500 sofa is only $1899.99 right now. What a great deal!" One experiment had respondents use the last two digits of their social security number as the initial price for a bottle of wine or other good. This complete…

Predictably irrational by Dan Ariely has a good number of case studies that I think illuminate the topic particularly well:

  http://www.amazon.com/Predictably-Irrational-Revised-Expanded-Decisions/dp/0061353248
Unsurprisingly there's some sort of combo deal to get Thinking Fast and Slow with it.

Re: Do not talk about pricing

#26

Post by j45 »

Pricing remains the hardest thing in almost any business.

I learnt from running a part of a furniture chain's website that garbage is often placed with the item people want to move.

Retail I learnt is more about selling profit than selling product or services.

Pricing remains hard, and tricky, and several states like California have made it illegal to display MSRP type pricing, because everything's a great deal.

Re: Do not talk about pricing

#27

Post by nitwit005 »

If you try to buy things, it's sometimes desperately frustrating that no one will just quote you a simple price. They have different pricing tiers, and want a salesperson to talk to you so they can pretend to give you a "special" discount, and all sorts of BS.

I'm sure these things work, but they also alienate customers sometimes. People have founded entire businesses on offering clearer pricing schemes.

Re: Do not talk about pricing

#29

Post by exolymph »

orangecat wrote: post #16
LoSboccacc wrote: post #15

Earlier quoted context omitted.

If anything peolpe are afraid to explore the curve to find maximum profit. Starting high and giving out discoubts at various level trough the year can help building a model and set the best price if it's not overdone (as in, customer expecting continual discounts)

if it's not overdone (as in, customer expecting continual discounts) I'm still surprised that Steam has so many discounts; they've basically trained me to never pay full price. But I feel no need to play new games right when they're released; maybe there are enough people that do.

Delivering games has minimal marginal cost to Steam. So they're not giving anything up by offering discounts.

Re: Do not talk about pricing

#30

Post by desdiv »

nitwit005 wrote: post #27

If you try to buy things, it's sometimes desperately frustrating that no one will just quote you a simple price. They have different pricing tiers, and want a salesperson to talk to you so they can pretend to give you a "special" discount, and all sorts of BS. I'm sure these things work, but they also alienate customers sometimes. People have founded entire businesses on offering clearer pricing schemes.

It's a funny world when Elon Musk will openly display "$90M to send 6.4mT of your shit into geosynchronous orbit"[0] and yet millions of businesses selling things that are far less expensive and far more fungible want you to "contact our sales team for a quote".

[0] http://www.spacex.com/about/capabilities

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