A couple years ago I wrote a post, The Myth of the Rational Consumer, in which I discussed evidence that customers really don’t want to change products or providers. I expanded on those views in a subsequent post The Myth of the Rational Consumer – Take 2. Much of the evidence I offered related to car owners who had selected specific brands and would not consider switching. Some recent events have demonstrated that although customers tend to be inert, if pushed too far, they will switch.
We are occasionally asked by clients or prospective clients to help them simplify their pricing. These requests are usually the result of the company struggling to manage the myriad prices they offer, but also often include a desire to make it easier to engage customers, or a desire to improve the margins on the lowest priced customers. In all cases, the companies want their overall profitability to improve. Unfortunately simplifying pricing is often not a good idea and can lower a company’s profits.
Many of us make New Year’s resolutions with great intentions, but perhaps miss carrying out some of them. Even if you made great progress this year, we hope you will join us in making and sticking to these resolutions. This is our fifth annual publishing of New Year’s Resolutions for Pricing