POS & PRICING

“Only put a price in front of a customer, if you fully understand what is motivating them.”

Chris Lema

The financial success of an innovation stands and falls with having the right price.

Classically speaking, price was always defined as “cost-plus” or simply based on what the competitor’s price was. Meanwhile, companies are switching over to configurating price based on behavioural economic principles. This actually means that there’s an active configuration of the decision contexts at POS, in the form of decision architects, increasing the chance that your product is being selected.

We’ll help you to understand the purchase decisions of your (potential) customers and help you to develop price strategies and decision architects with this knowledge.

Doing it this way often allows undreamed-of margin potentials to be opened or for completely new price models to be developed.

Sucess Factors of Customer Behaviour Pricing

A particular challenge is the pricing of disruptive innovations: here there’s no competition or existing cost structure to use for orientation. In most cases, price also needs to be defined at an early stage of the innovation process so that the corresponding business model can be calculated. Particularly, in these cases is the development of a price model, based on purchase behaviour research, inevitable. An analysis of value experience, the reference context and the purchase decision is a good basis for developing a successful price strategy.

Pricing

Desicion Journey

Where along the path to purchase are preliminary decisions made which can or need to be reflected in the price communication?

Simplify

Make it simple for the customers to decide for your product:

– Clear price positioning

– Clear product positioning

Decisiontypes

Support the different decision types in the best possible way when they’re buying, especially those that are opportunity-orientated vs. loss aversive.

Price Aesthetics/System

Determine the decisive price thresholds and price aesthetics to the point of the business case.

Value Perception

Communicate and focus on the fundamental profit drivers.

Decision Architecture

Simplify the purchase decision at POS and guide the choice to your own product with “nudges”.

Do you want to achieve greater margins?

What we do:

We’ll support you in all areas of your POS and pricing strategy. Achieve greater margins with behavioural pricing without alarming your customers’ price sensitivity.

You’d like to define basic price principles?

Portfolio & Pricing Strategy

Develop optimised behaviour guidelines which you can use for constituting your price.

You want to find the right introductory price?

Product Price Determination

Determine for your new product or your new service the ideal price.

You want a convincing category management strategy?

Category Management Consultancy

Increase customer loyalty and turnover with close partnerships with commerce.

You want a convincing category management strategy?

Quick Change of Strategy

React quickly and unerringly to your competitors’ price changes.

What you receive:

Margin Optimisation

Immediate Impact

Perspective

Optimised Shelf Presentation

Fitting Price

Price Principles

Our Toolbox:

Online Insight Communities + -

Via the online platform customers express and discuss their experiences in their natural setting. The intensive interaction (across multiple days) leads to an in-depth understanding of the purchase decision and information processes. The interactive platform allows individual attitudes and patterns, e.g. for the customer decision mapping, as well as group dynamic effects to be identified. For this we use a comprehensive set of psychological question techniques.

Quantitative Measurement + -

The quantitative validation of purchase decision making processes isn’t standardised. Similarly, is true for the evaluation of different pricing strategies. As a matter of principle, we recommend experimental designs with fixed choice scenarios as opposed to a choice based conjoint exercise. In experimental designs, we can reproduce (simulate) e.g. decoy and anchor effects realistically, which a conjoint doesn’t allow us to do. If, however, the topic is product design or bundling, a conjoint is frequently the best method. It’s crucial though that the analysis is conducted along the Behaviour Economics principles.