A retailer client considering pulling back on a certain marketing vehicle because “it wasn’t working.” The supporting evidence was the same-store sales percentage growth numbers (“comps” in retail parlance) of the markets in question. Of the eight markets in question, 5 were down, 2 were… Read More »Using Big Tools to measure Small Impacts
As data and analytics become more important to firms’ strategies, senior leaders are demanding more insights and more depth from their analytics teams (whether internal or 3rd party). But many are receiving only thin answers to narrow problems. When they ask clarifying questions, they’re given complex mathematical… Read More »3 Signs You’re A Hostage to Analytics
We’re asked all the time for some good books around analytics, big data, and their applications to business. We love what we do, so after a short poll around the office, we put this together.
A recent HBR article titled “Understanding Fairness is the Key to Keeping Customers” caught our eyes this week. From the headline we expected another rant on what a “fair” price is, conflating ethics with price setting. We were relieved to discover it’s actually a more tactical guide to the perception of fairness in pricing. Customer perception of a price, whether it can be described as “fair” or not, is obviously one of the key drivers of elasticity, and is ignored at retailers’ peril.Read More »“Fairness” in Pricing
Imagine you’re in negotiations for a new job, and the hiring manager says “Well, we’ll throw in the ‘gold’ relocation package instead of the ‘silver'” at the very end, and doesn’t ask for anything from your side. How much different do you think the ‘gold’ package is from the ‘silver’ version?
Another day, another incendiary article up in arms about the fact that two people may see different prices at the same website. The truth of the matter, as usual, is much less exciting as it sounds. We’ve worked with retailers and their pricing strategies as… Read More »Online Price Discrimination: Neither Nefarious nor Unethical
In some sectors changing price isn’t as easy as a new shelf sticker. But that doesn’t mean it’s acceptable to communicate your price thoughtlessly, as APS did below. While I’m sure it’s that the power company’s cost structure is changing, blaming conservation efforts is not just artless, it’s bad for business. And using allowed to implement a new charge” does little except angers customers as they pay their bill.
I once asked a contractor about those Central Vacs that have some houses have, and he shrugged and said “I’ve ripped just as many out as I’ve installed.” We’ve seen just as many retailers pull out their retail pricing optimization software as they’ve installed, because you get outcomes like the below:Read More »The Dangers of Retail Pricing Software
As firms grow in sophistication with their pricing capabilities, at some point they exhaust the opportunities that internal to their company, and start looking outside to explore the dynamics of the industry. That’s where they first encounter game theory, though many struggle with how to apply it to their strategy.
What is game theory?
In short, it’s the idea that the landscape is made up of rational players, and that they will act on their own and react to your decisions over time.
So how does that apply to pricing?
It’s easiest to start with a thought experiment: What if they were as smart as you are? Here’s a case study from a recent engagement.Read More »Game Theory in Pricing
I love Derek Thompson at the Atlantic. But this article compares “attention” and “users” across marketing vehicles, which ends up having very little to do with marketing ROI for advertisers. The largest advertisers are not dumb- they utilize advanced statistical modeling and toolsets to optimize… Read More »More on “The Death of Print” Or not?