Friday, October 2, 2015

The topic is price and pricing


 I just finished and mailed the one hundred and twenty-seventh issue of our Perfume Strategies newsletter. The four articles in this issue all involved pricing strategies and the advantages an online business has in experimenting with price.

    The articles were inspired by a special subscription offer I received from The Washington Post, now owned by Jeff Bezos of Amazon fame, and an article I cam across about the Triangl bikini company, a business said to have been launched to fill an unserved niche in the bikini market. Both Amazon and Triangl sell online exclusively.

    The Bezos link, to me, was particularly interesting and while I won't go into the details of the offer I received, I will confess that I was hooked by it and paid the price. I expect that, when renewal time comes around, I'll receive more bold and interesting offers.

    The hook wasn't in the copy, it was in the price. Now that I've revealed this you can guess that the price was remarkably low. But the Post got a new subscriber and their cost to service my account is likely close to zero (excluding administrative overhead).

    The offer I received was bold and was likely sent to a limited number of potential subscribers. These people aren't fools. They aren't trying to build a business on the subscription rate I received but they are gathering valuable data and in my case they did move the needle from my being an occasional reader to my becoming a paid subscriber.

    But I suspect, at the moment, the data from their tests is more important to them than the access they are giving me to the Post. And now, from viewing the Post daily, I am guessing they are conducting many experiments and gathering a great deal of data -- data that will mold the product, The Washington Post, as the data is analyzed and the analysis acted upon.

    What do you charge for a bottle of your perfume? How did you arrive at that price? Is your price simply some multiple of your cost? Have you priced your fragrance based on what others charge for their? Have you done tests to determine the most profitable price for your perfume? Have you asked yourself how having some price data from customers might help you develop a more commercially successful perfume? Are there bold but intelligent tests you could be making to learn more about people who have been watching you -- but are not quite yet your customers?

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