Our Pricing Research mainly uses our Predictive Sales Assessment (PSA™). This method allows us to measure discreet willingness to pay for every product, company, and customer attribute. The PSA™ method also allows us to combine these features into bundles, allowing recommendations of prices for products or services, product or service versions, and the price uplift for each feature.

The Images on the left are two examples of segmenting the baseline Predictive Sales Assessment to gain a more detailed understanding of a company’s market.

Much of the value of Pricing Research comes from how the baseline data of the Predictive Sales Assessment is segmented. Each segment consists of one answer to a question. It is essential to understand that the more questions and answers included in the Pricing Research, the more detailed the segmentation analysis can be and the more value the project will provide.

• The upper images show segmentation based on the respondent's title of a B2B Pricing Research project. We can see that for this particular product, Executives/Owners/Presidents will generate the highest sales volume at relatively low prices. In contrast, Managers/Supervisors will generate the highest sales volume at relatively high prices. The company should target Managers/Supervisors as this will lead to the highest sales volume and revenue at high prices.

• The lower image shows segmentation based on marketing messages in a B2C Pricing Research project. We can see that Message 1 will generate high sales volume at relatively low prices, whereas Message 2 will generate high sales volume at relatively high prices. The company should use Message 3 to ensure the highest sales volume and revenue.

The image shows the baseline Predictive Sales Assessment. On the X-axis is the price, and on the Y-axis is the predicted sales volume and predicted revenue at different prices. 

The red line shows an accurate prediction of sales volume at different prices. A few notes: 

• The price itself sets an expectation in the buyer’s mind about the quality and benefit of a product or service. Hence, a too-low price leads to a reduction in sales volume. A too-high price prevents a portion of potential buyers from buying; thus, higher prices also lead to lower sales volume.

• Consequently, there is always a price that leads to the highest sales volume.

The blue line shows an accurate prediction of revenue at different prices. A few notes: 

• The price that generates the highest revenue is always higher than the price that generates the highest sales volume. Thus, companies can decide to trade sales volume for revenue.

• In this example, there are two revenue peaks. This is common. 

Price Walls are psychological price points that affect sales volume and revenue. You need to know the price where these price walls occur to price on the “right” side.. 

Respondent sourcing and qualification are crucial in Pricing Research. We use panel companies and, very occasionally, our clients’ contact lists. Respondents from panel companies can often be targeted on more than 200 variables, either B2B or B2C. The panel company distributes to the targeted audience, who will first see a project description. Some will bounce out. Those who are not will go through a series of qualification and disqualification questions designed so that only those respondents with specific domain knowledge and experience will be qualified. In consequent data processing, our AI software can identify those who were not truthful when they filled in the research instrument, and those will also be disqualified. Even after detailed respondent’ targeting, we disqualify 90 - 95% of those who enter the research project. This ensures only the “right” audience is considered.