The Psychology of Pricing: A Gigantic List of Strategies • Hacker News Board

Re: The Psychology of Pricing: A Gigantic List of Strategies

#71

Post by chippy » Thu, May 07, 2015, 3:55 PM UTC

QuantumRoar wrote: post #69

chippy wrote: post #57

Earlier quoted context omitted.

Are you are suggesting consuming based on how the company makes you feel? If they make you feel good, or convince you that they are doing good work then should they get more business? Is that rational? What if they are lying or exaggerating? Doesn't a lot of marketing and advertising seek to increase the positiveness of the particular brand? How about morality? How about if a charity uses these tactics in their fund…

> If they make you feel good, or convince you that they are doing good work then should they get more business? Is that rational? What if they are lying or exaggerating? It is certainly more rational to believe a company should get more business if they can convince you that they're doing good work or better work than others. In order to protect customers from lying or exaggerations, there are (ideally) laws in place…

I like the idea about the charity. In the UK we have what's been called "chuggers" - charity muggers. Essentially doorstep and high street salesmen, these professionals work on behalf of many well loved charities but they harass and aggressively try to make sales.

Councils and people have tried making laws to enforce against them but they do not succeed because the charities are well liked by the majority of the population. So on the whole the charities do lots of good and people cannot effectively complain against their fund raising tactics. The charities do not suffer as a result of this, and those who support the charities do not suffer.

Is any kind of physical cold calling, being stopped in the street, or at your doorstep manipulative? Does it seek to control people into donating to the charity? Yes. Is it objectively wrong? I don't know, but personally I think it is subjectively. Do some people dislike the behaviour? Yes. Do some people like the charity nonetheless? yes.

Re: The Psychology of Pricing: A Gigantic List of Strategies

#72

Post by scott_karana » Thu, May 07, 2015, 4:15 PM UTC

CyberDildonics wrote: post #55

mbesto wrote: post #9

Nick, this is extremely impressive and I applaud you for putting this together so concisely. Some comments: 1. Kahneman and Ariely both mention in their writings how their is a difference between free and even just 1 penny. Especially given how popular Freemium is I thought this might be a good topic for you to cover. (Ariely calls this "market norms" vs "social norms") 2. A common theme here on HN (mainly from peopl…

1. Barrier to entry is very important. Games have an investment in learning the mechanic so getting people to make that investment is something that makes sense to split from the investment of money. 2. Check out the history of Chivas Regal. They were a low shelf blended scotch and at some point decided to simply double their price. No label change, nothing different. Their sales actually went up (and their profit wa…

Since I couldn't find any historical citations about the story:

http://writingabookwithwally.com/writing-a-book/checking-the...

Still interesting.

Re: The Psychology of Pricing: A Gigantic List of Strategies

#73

Post by copsarebastards » Thu, May 07, 2015, 7:23 PM UTC

wordbank wrote: post #66

copsarebastards wrote: post #5

This kind of stuff is a strong argument for communism. An immense amount of mental energy was squandered on creating this list (not Nick Kolenda, the people who studied these things). That same energy could have been spent on curing any number of psychological ailments, but instead it was spent on getting people to pay more for less. It's interesting, but as far as I'm concerned the energy was wasted.

The strongest argument against communism is "How could a man plan economy if he can't plan his todo list app without producing bugs?" People tend to fail in simple predictions but communists and hardcore socialists still believe they can manually control systems of enormous complexity. Number of failed communist regimes confirms they can't. (But these regimes are quite good at producing death and starvation.)

You seem to have conflated communism, an economic system, with totalitarianism, a system of government.

There are plenty of working socialist republics, and democratic communes are alive and well (albeit on a smaller scale).

Re: The Psychology of Pricing: A Gigantic List of Strategies

#74

Post by charles2013 » Thu, May 07, 2015, 7:48 PM UTC

blumkvist wrote: post #64

charles2013 wrote: post #48

a colleague sent me a link to "tactic 14." after reviewing the citations i'm skeptical of the rest. it appears the author misunderstood some research he cited. the thesis for tactic 14 is: > Anchoring not only works for prices, but it also works for any number, regardless whether that number is a price. the SSN example demonstrates anchoring based on price (not just any high number). the results of this experiment wo…

I skimmed through the article and saw some misunderstandings of research too. Also another thing that made me raise an eyebrow - "You should avoid charging different prices based on past behavior, demographics, or any other factor besides natural supply and demand." Clicked the "X" shortly after. People are eating out of his hand it seems though, so he has that going on for him at least. Many ebooks will be sold.

i'm disappointed this made it to the top of the front page yesterday with such little criticism. it feels like something written by an intelligent yet naïve marketing undergrad, not something on which to base pricing strategy.

> "You should avoid charging different prices based on past behavior, demographics, or any other factor besides natural supply and demand."

wow. what an incredibly stupid recommendation. based on this, every major grocery chain should terminate their loyalty card program, many luxury products/services should never see the light of day, and perhaps the rest of us should just start businesses in perfectly competitive markets with little hope of long-term economic profit.

an aside: searching for "you should avoid" led me to another incredibly naïve recommendation: "you shouldn’t A/B test your prices."

there are so many ways to test pricing it seems irresponsible to dissuade people from doing this, especially in the context of a gigantic list of pricing strategies.

here are just a few types of tests that come to mind:

* practically any promotional/limited offer pricing scheme could (and probably should) be tested.

* prices of users' shopping cart items saved for later (e.g. amazon) - can a/b test same items in different users' shopping carts and measure purchase patterns

* grocery coupons for people in different zip codes - most people don't get coupons for other neighborhoods so they won't see two prices

anyway. rant over :)

Re: The Psychology of Pricing: A Gigantic List of Strategies

#75

Post by nkolenda » Thu, May 07, 2015, 8:47 PM UTC

charles2013 wrote: post #74

blumkvist wrote: post #64

Earlier quoted context omitted.

I skimmed through the article and saw some misunderstandings of research too. Also another thing that made me raise an eyebrow - "You should avoid charging different prices based on past behavior, demographics, or any other factor besides natural supply and demand." Clicked the "X" shortly after. People are eating out of his hand it seems though, so he has that going on for him at least. Many ebooks will be sold.

i'm disappointed this made it to the top of the front page yesterday with such little criticism. it feels like something written by an intelligent yet naïve marketing undergrad, not something on which to base pricing strategy. > "You should avoid charging different prices based on past behavior, demographics, or any other factor besides natural supply and demand." wow. what an incredibly stupid recommendation. based…

Thanks for the feedback. I don't mind the criticisms - I think a healthy debate is good. :) However, I just want to clarify something.

> "You should avoid charging different prices based on past behavior, demographics, or any other factor besides natural supply and demand."

That quote is taken out of context. Obviously you should determine prices based on those factors. That quote was referring to dynamic pricing and how you shouldn't charge different customers different prices based on those factors (e.g., I'll charge $200 to Customer X, but I'll charge $150 to Customer Y because I don't think he'd buy at $200).

Re: The Psychology of Pricing: A Gigantic List of Strategies

#76

Post by blumkvist » Thu, May 07, 2015, 9:23 PM UTC

nkolenda wrote: post #75

charles2013 wrote: post #74

Earlier quoted context omitted.

i'm disappointed this made it to the top of the front page yesterday with such little criticism. it feels like something written by an intelligent yet naïve marketing undergrad, not something on which to base pricing strategy. > "You should avoid charging different prices based on past behavior, demographics, or any other factor besides natural supply and demand." wow. what an incredibly stupid recommendation. based…

Thanks for the feedback. I don't mind the criticisms - I think a healthy debate is good. :) However, I just want to clarify something. > "You should avoid charging different prices based on past behavior, demographics, or any other factor besides natural supply and demand." That quote is taken out of context. Obviously you should determine prices based on those factors. That quote was referring to dynamic pricing and…

Price discrimination is like the most wide spread marketing initiative period. Don't worry ebook buyers don't like to read comments, you're safe :)

Re: The Psychology of Pricing: A Gigantic List of Strategies

#77

Post by wordbank » Fri, May 08, 2015, 2:13 AM UTC

copsarebastards wrote: post #73

wordbank wrote: post #66

Earlier quoted context omitted.

The strongest argument against communism is "How could a man plan economy if he can't plan his todo list app without producing bugs?" People tend to fail in simple predictions but communists and hardcore socialists still believe they can manually control systems of enormous complexity. Number of failed communist regimes confirms they can't. (But these regimes are quite good at producing death and starvation.)

You seem to have conflated communism, an economic system, with totalitarianism, a system of government. There are plenty of working socialist republics, and democratic communes are alive and well (albeit on a smaller scale).

Communism is a philosophy in the first place. It leads to a certain type of governing and managing economy. On practice it also lead into a totalitarian state every single time.

Re: The Psychology of Pricing: A Gigantic List of Strategies

#78

Post by sukilot » Fri, May 08, 2015, 5:24 AM UTC

csomar wrote: post #46

I hate SPAM and promise to keep your email safe. Then why are you asking for my email? I hate it when they ask for your email for something can be provided without. And the worst part is that it doesn't tell you if it's going to send more emails.

It doesn't say he won't email you . he is going to email you.

Re: The Psychology of Pricing: A Gigantic List of Strategies

#79

Post by olivier1664 » Fri, May 08, 2015, 5:47 AM UTC

joeyspn wrote: post #44

Conversion rate of 2 --> 2.39% Converison rate of 1.99 --> 5.2% Mind = Blown. I mean, I knew the *.99 affected the consumer perception about the price, but not in such a huge way... Fantastic article (and blog). PS: The "leaving know" modal is annoying, I was just trying to switch tabs

That's impressive. Unfortunately the source* of theses number is not very clear on how many items has been sold and if people buy by unit or by pack. I would love to see more tests result like that.

http://blog.gumroad.com/post/64417917582/a-penny-saved-psych...

Re: The Psychology of Pricing: A Gigantic List of Strategies

#80

Post by copsarebastards » Fri, May 08, 2015, 11:53 AM UTC

wordbank wrote: post #77

copsarebastards wrote: post #73

Earlier quoted context omitted.

You seem to have conflated communism, an economic system, with totalitarianism, a system of government. There are plenty of working socialist republics, and democratic communes are alive and well (albeit on a smaller scale).

Communism is a philosophy in the first place. It leads to a certain type of governing and managing economy. On practice it also lead into a totalitarian state every single time.

Communes and kibbutzes are almost universally democratically governed, so no it does not lead to a totalitarian state every time. That's a ridiculous claim.