What’s-Your-Price_ copy

What’s your price?

by with No Comment Business

What’s your price?

Is it worth the retailers to play with the “pay what you want” price? Shelle Santana explains how much, and why, customers will pay the interesting logic behind it. One finding: Sellers must dramatically change for what other customers are prepared to pay.

Santana found that by subtly influencing the atmosphere, sellers can drastically alter what certain customers are willing to pay, in a series of experiments — including a field experiment where she posed with students as snack bar employees.

Many businesses use the tactic as a campaign to attract new clients, often with a social tie-in as an additional incentive — for example , a restaurant runs a PWYW campaign and donates some of the proceeds to a charity to feed the hungry.

Nonetheless, all PWYW methods are produced equal. Santana analyzed data from a New York pet adoption service, discovering that patrons on average charged below the $150 adoption rate, some charging as much as $260. But the most common ticket price paid was a penny for a PWYW premiere of the documentary Freakonomics. “It got me wondering, why these cases are so different,” Santana says.

Borrowing from literature on social psychology, she conjectured it may have something to do with how the way consumers think about the transaction influences their actions.

Many people are “pro-social” when faced with a decision about how to distribute resources between themselves and others, meaning they are likely to seek an fair distribution of resources, while others are “pro-self,” meaning they are seeking to maximize value for themselves. She asked, will people with pro-social values pay more when presented with a PWYW situation?

Although previous research has shown that consumers are willing to pay more when a portion of the proceeds are donated to charity, research by Santana and Morwitz suggests that such a expensive tie-in may not be necessary.

Your-Clients-Have-Shifted.-Here’s-How-To-Get-Them-Involved-Again copy

Your clients have shifted. Here’s how to get them involved again

by with No Comment Business

Your clients have shifted. Here’s how to get them involved again

The shock from coronavirus has more disrupted than jobs, supply chains and financial markets. The consumer too has radically changed. For several companies now the number one challenge is to figure out where their B2C and B2B clients have relocated to and re-engaged with them.

COVID-19 is a beast separate from previous global disasters and recessions, such as the 2008 Great Depression and the Mideast oil crisis, the triggers of which were financially induced. Health and safety issues are the underlying cause of the pandemic, and thus consumer focused. The immobility of consumers and their willingness to be secure in the current world has culminated in uncertainty in sales and profitability across categories of idiosyncratic goods, culminating in a net economic downturn of a nature that has not been experienced by anyone alive today.

Government-imposed quarantines, self-isolation, and shop and office closures have prompted further customer shifts, and thus firm-based behaviours. The outcome of the wellbeing and concerns of consumers has resulted not in a typical recession but rather a “deaccession,” where supply and demand remain, but dramatically shut down consumer access to goods and services.

All in all, this combination of conditions and tighter budget restrictions make consumers less able to spend and less likely to spend in contrast with previous recessions. Where are you going to find those? When do you keep them engaged?

How do businesses adjust?

It is evident in the COVID-deaccession is that this change in consumer behavior is moving businesses into a new “directional reality.” By adopting a more customer-centric approach, corporations need to respond to changing customer desires. They need to go to their customers, rather than expect their customers to come to them.