Smarter Pricing: How to capture more value in your market

Pricing that impacts consumption

Pricing strategies can also influence patterns of consumption positively. Consumption is vital because people are unlikely to buy more until they have consumed the initial purchase. The impact may be greater than this. Consider a football club with a season ticket offer. If season ticket holders do not attend matches, then potential revenue is lost for sales of programmes, burgers, hot dogs, soft drinks, clothing and other souvenirs. How can pricing encourage consumption? Imagine two people who pay the same fee to join a health club. In a 2002 study, John Gourville and Dilip Soman of Harvard Business School found that someone who pays $50 per month is more likely to attend regularly (and renew their membership ...