- An Educated Guess Is Still Just a Guess
- The Price Is Personal
- Wait! I'll Pay More!
- Concurrent Dynamic Pricing
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The Price Is Personal
First, a reality check. The one major fact of e-commerce today is that the customer is in control. With your competitors just a mouse click away, your company must offer not only the right price, but also the right pricing method for a particular customer and situation. The Internet has ushered in new times with new ways to play the pricing game. The one-size-fits-all pricing strategy is obsolete—may it rest in peace. Besides, it never really was designed for the long haul anyway.
Fixed pricing is a relatively new invention. From the earliest days of human commerce thousands of years ago, all types of flexible pricing methods have existed—bartering at the community bazaars, auctions, and even co-op buying, in which farmers banded together to get volume discounts on feed and equipment. In comparison, fixed pricing has been around for only about 100 years.
Now, with the technology of the Internet, pricing can get personal again. And by personal, I don't mean just preferred pricing for repeat customers, but the ability of each and every consumer to buy at the price he or she is willing to pay.
Now there has been many a flexible pricing scheme tried over the last few years on the Internet. Auctions, reverse auctions, Dutch auctions, comparison shopping, group buying, exchanges, bartering, and a host of other buying contrivances offered shoppers the ability to choose their own price. One of the main problems with these flexible pricing schemes was the troubling thought that the merchant was leaving money on the table by selling too low. This because the consumer was in control of the transaction. He or she either pitted one merchant against another for a better price or just waited for the price to reach the desired level and then purchased.