Use case The objective is to stimulate elasticity thanks to the effect of the psychological price without biasing the calculation of the optimum price. Meet with one of our Pricing experts Psychological pricing
You wish to implement psychological pricing on part of your catalog, for example by proposing prices of the type X.99 €.
Challenges
Méthodology
Identify the optimal price configuration using the customer’s price sensitivity calculation (elasticity) – Example: €87.12 is my optimal price.
Iterate around my “optimal” price, using “.99” logic, with a different psychological price – Example: 84.99 vs 86.99 vs 87.99 vs 89.99.
Assess the extent to which the price point layer adds value
Deploy the price point that best fits the objective.
Apply optimal price rounding up or down on the optimized price
Achievements
Our experience shows that “psychological pricing” can provide a 10% volume increase in an inelastic segment!
Iterate around my “optimal” price, with “.99” logic, with a different psychological price – Example: 84.99 vs 86.99 vs 87.99 vs 89.99.
Round up or down the “optimal” output price defined by the customer’s chosen use case optimization.
+70% of products displayed with a consistent and optimal rounding rule
Evaluate the potential of price elasticity on your business