Blog
Last week I read an article in the Wall Street Journal, The Dubious Management Fad Sweeping Corporate America, which said that American companies were irrationally obsessed with their net promoter scores, NPS. Last year 155 S&P 500 companies cited their NPS during earnings conference calls, none of whom said their score was declining. All of […]
Two weeks ago I wrote a post Dynamic Pricing Made Simple, in which I explained the concepts underlying dynamic pricing. Stated simply, the demand for a product or service can vary depending on the situation, and the amount customers will pay in those situations also varies. Significant profit improvement is available for the companies that […]
I am often asked about dynamic pricing – what it means and how it is implemented. The short answer is dynamic pricing is a process of maximizing profit by adjusting prices based on demand. Earlier this month it was reported that New York City is considering congestion pricing to ease traffic gridlock. Congestion pricing is […]
After Amazon bought Whole Foods in 2017 I wrote a post, Amazon Unlikely to Start Grocery Price War. This past week, Amazon announced some price reductions, Amazon Cuts More Prices at Whole Foods. So, was I wrong in my original post? No, but market competition has increased, and the company is adjusting accordingly. I still […]
Much has been written about pricing power, which is the ability to raise prices and have customers continue to buy from you. Disney, Netflix, and Pfizer have recently shown us examples of exercising their pricing power to improve their overall profitability. Last week, I was reminded of Martin Shkreli, an example of an egregious abuse […]
In a recent conversation with my son, he observed that New York’s MTA charges $2.75 for each subway ride, but the options for card refills are generally not divisible by that amount. In his view, this practice is not very customer-friendly and is likely harmful to the business. I agreed it is not customer-friendly, but […]
We have all heard the term “loss leader”, and we have all heard someone say, “We’ll make it up on volume.” Most people don’t think about it much, even when we see advertisements indicating a company is selling below cost. During some recent conversations I was asked when, if ever, it makes sense to sell […]
Apple recently lowered their estimates of Q1 2019 Sales, citing slower iPhone sales among other factors. Since then I heard from several people that Apple’s pricing strategy was wrong, and they had misjudged price elasticity. My response is to quote Aaron Rodgers, QB of the Green Bay Packers, “Relax.” While Apple clearly overshot with pricing […]
Apple recently lowered their estimates of Q1 2019 Sales, citing slower iPhone sales among other factors. Since then I heard from several people that Apple’s pricing strategy was wrong, and they had misjudged price elasticity. My response is to quote Aaron Rodgers, QB of the Green Bay Packers, “Relax.” While Apple clearly overshot with pricing […]
