Coming in this section

This is where you'll find pricing resources that are written in a marketer-friendly manner. We expect to take the gist of academic knowledge and translate it into actions that a day-to-day practioner can understand, implement, and profit from.

Note: Articles from pricing experts on pricing strategy are welcome. Please send them to Jensen at PricingStrategyResources.com for approval.

Pricing below "barrier" prices

How to increase sales by 10% -- by cutting a penny from your price!

If your product or service is priced at a whole number, you’re throwing away sales – unless your product is a specific type mentioned later in this article.

To tap the power of human psychology, your price should not be $15 or $10,000. Instead, $14.99 and $9,950 are likely to gain you 5-15% more orders.

And… we all know this. The problem is that lots of people think they’re too smart to use this technique. More

Value Pricing Strategy

"We're not the cheapest, but...

In this highly competitive online marketplace, it can be difficult to persuade customers to buy from you when you offer a similar product to your opposition but with a higher price tag. And trying to beat competitors on price alone is a cut-throat business, very risky and not recommended. It attracts bargain hunters ready to defect to competitors for a better deal.

Using a value-pricing strategy is a better proposition because it attracts loyal customers. Why do customers buy designer-labelled clothes and luxury cars? Why are those items More

Pricing structure for new products

Interview with Internet marketing guru Harmony Major

Q. Have you found a way to charge different prices to different buyers?

A. I always try to have different pricing levels for my products, which really can increase your response and conversion rate. Especially when your products/services are priced higher than normal. We have to realize that there are people who'll need each and every service you include in that "premium" product, but that there are others who may not want to pay your premium price just to acquire or use a product or service that they'd only have use for PART of.

Because a lot of the times, it's not about whether or not your prospect has the money for what you're offering. It's about whether or not they feel that the price they're paying justifies how many of the "pieces" of your product they'll actually use.

I'm not sure I explained that well, so let me give an example. More

Are your discount levels hurting your sales?

The best way to determine optimal discount levels is to systematically test alternatives in the marketplace, as do direct marketers. Other marketers, under time constraints, often use less systematic methods to determine discounts – such as industry convention, competitive response or historical precedence.

Using unsystematic methods of setting discounts may result in three potentially negative outcomes:

• Even if the discount achieves a managerial objective (e.g., to sell X units, increase sales by X%, etc.) – you can’t know if a smaller discount would achieve a similar sales response but with a higher profitability.
• The deeper discounts used may be associated with a lower perception of quality, which may discourage some consumers from buying, thus lowering your unit sales potential.
• A lowered perception of quality may affect brand loyalty. More