Smarter Pricing: How to capture more value in your market

Chapter takeaways

• Contrary to expectation, pricing can stimulate behaviours that may not be rational. Some of these may have a negative profit affect. For example, price promotions may set reference price levels that discourage future purchases at full price.

• There are seven ways that pricing can encourage profitable behaviours. These draw on social psychology.

• Customer psychology could be used to exploit customer vulnerabilities. The better long-term strategy is to operate with price integrity so that trust is retained.