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Impact Pricing
United States
เข้าร่วมเมื่อ 18 ก.พ. 2020
Impact Pricing - Win more deals at higher prices by understanding VALUE.
How Behavioral Economics Influence Consumer Decisions Effectively with Kristen Berman
How Behavioral Economics Influence Consumer Decisions Effectively with Kristen Berman
--------------------------------
Summary:
--------------------------------
Kristen Berman co-founded Irrational Labs, a behavioral product design company, with Dan Ariely in 2013. Irrational Labs helps companies and nonprofits understand and leverage behavioral economics to increase the health, wealth and happiness of their users.
In this episode, Kristen explores the intricacies of pricing strategies, emphasizing the importance of understanding behavioral economics to influence consumer decisions effectively. She discusses how techniques like the decoy effect, anchoring, and the power of price endings (like 99 cents) can drive customer behavior. Additionally, she highlights the challenges of pricing revolutionary products due to the lack of reference points and the creative approaches needed to establish them in the market.
--------------------------------
Why you have to check out today’s podcast:
--------------------------------
- Deep dive into pricing strategies like the Good-Better-Best model, the Decoy Effect, and the psychology behind price ending to help you understand how to make pricing decisions that drive customer behaviors and increase sales.
- Find out valuable perspectives on how human psychology influences purchasing decisions which is essential for anyone looking to optimize their pricing or marketing strategies.
- Discover practical advice and real-world examples to see how you can apply these concepts to your own business.
"It's all relative. So, what are customers using as a reference point? If it's off your product site, then you need to help them create a new reference point within your product site."
- Kristen Berman
--------------------------------
Topics Covered:
--------------------------------
01:14 - Sharing how she transitioned into behavioral economics from her role as a product manager at Intuit
03:42 - How behavioral science tie to pricing and product
06:10 - An example of how behavioral economics influence product decisions
08:50 - Explaining the concept of the "paradox of choice"
11:35 - Turning the path of least resistance into the preferred choice
14:30 - Simplifying decision-making for customers with the concept of "good, better, best" product offerings
16:42 - Explaining the decoy effect and how it influences consumer decision-making
19:09 - The reason behind the presentation of pricing options in the context of behavioral economics
22:43 - The concept of framing in sales in the context of product features and the importance of trials in subscription-based models
25:25 - How people often rely on heuristics, or mental shortcuts, when making decisions about prices
28:56 - Kristen's best pricing advice
29:28 - Various sources of reference points
31:19 - The challenge of pricing revolutionary products due to the lack of existing reference points
--------------------------------
Key Takeaways:
--------------------------------
"People don't come in with an understanding of the exact thing that they want to purchase at the exact moment. And so, our job is to help them understand value, and choice helps people understand value." - Kristen Berman
"We're using the heuristics on how big the number is to make a lot of fairness decisions." - Kristen Berman
"We are relative creatures. We have reference points and we use our reference points to understand value. And so, it's not just the price, it's the reference point that we're using." - Kristen Berman
--------------------------------
People/Resources Mentioned:
--------------------------------
- Intuit: quickbooks.intuit.com/
- TikTok: www.tiktok.com
- Airbnb: www.airbnb.com
- Dan Ariely: danariely.com/all-about-dan/
- One Medical: www.onemedical.com
- Steve Jobs: en.wikipedia.org/wiki/Steve_Jobs
- Apple: www.apple.com/
- TH-cam: www.youtube.com
- Netflix: www.netflix.com/
- Study: play.google.com/store/apps/details?- id=com.thesoundagency.study&hl=en_ZA&pli=1Shopify: www.shopify.com/ph
--------------------------------
Connect with Kristen Berman:
--------------------------------
- LinkedIn: www.linkedin.com/in/kristenberman/
--------------------------------
Connect with Mark Stiving:
--------------------------------
- Email: mark@impactpricing.com
- LinkedIn: www.linkedin.com/in/stiving/
VISIT THE IMPACT PRICING PODCAST for Full Show Notes and Resources:
impactpricing.com/podcast/
--------------------------------
Summary:
--------------------------------
Kristen Berman co-founded Irrational Labs, a behavioral product design company, with Dan Ariely in 2013. Irrational Labs helps companies and nonprofits understand and leverage behavioral economics to increase the health, wealth and happiness of their users.
In this episode, Kristen explores the intricacies of pricing strategies, emphasizing the importance of understanding behavioral economics to influence consumer decisions effectively. She discusses how techniques like the decoy effect, anchoring, and the power of price endings (like 99 cents) can drive customer behavior. Additionally, she highlights the challenges of pricing revolutionary products due to the lack of reference points and the creative approaches needed to establish them in the market.
--------------------------------
Why you have to check out today’s podcast:
--------------------------------
- Deep dive into pricing strategies like the Good-Better-Best model, the Decoy Effect, and the psychology behind price ending to help you understand how to make pricing decisions that drive customer behaviors and increase sales.
- Find out valuable perspectives on how human psychology influences purchasing decisions which is essential for anyone looking to optimize their pricing or marketing strategies.
- Discover practical advice and real-world examples to see how you can apply these concepts to your own business.
"It's all relative. So, what are customers using as a reference point? If it's off your product site, then you need to help them create a new reference point within your product site."
- Kristen Berman
--------------------------------
Topics Covered:
--------------------------------
01:14 - Sharing how she transitioned into behavioral economics from her role as a product manager at Intuit
03:42 - How behavioral science tie to pricing and product
06:10 - An example of how behavioral economics influence product decisions
08:50 - Explaining the concept of the "paradox of choice"
11:35 - Turning the path of least resistance into the preferred choice
14:30 - Simplifying decision-making for customers with the concept of "good, better, best" product offerings
16:42 - Explaining the decoy effect and how it influences consumer decision-making
19:09 - The reason behind the presentation of pricing options in the context of behavioral economics
22:43 - The concept of framing in sales in the context of product features and the importance of trials in subscription-based models
25:25 - How people often rely on heuristics, or mental shortcuts, when making decisions about prices
28:56 - Kristen's best pricing advice
29:28 - Various sources of reference points
31:19 - The challenge of pricing revolutionary products due to the lack of existing reference points
--------------------------------
Key Takeaways:
--------------------------------
"People don't come in with an understanding of the exact thing that they want to purchase at the exact moment. And so, our job is to help them understand value, and choice helps people understand value." - Kristen Berman
"We're using the heuristics on how big the number is to make a lot of fairness decisions." - Kristen Berman
"We are relative creatures. We have reference points and we use our reference points to understand value. And so, it's not just the price, it's the reference point that we're using." - Kristen Berman
--------------------------------
People/Resources Mentioned:
--------------------------------
- Intuit: quickbooks.intuit.com/
- TikTok: www.tiktok.com
- Airbnb: www.airbnb.com
- Dan Ariely: danariely.com/all-about-dan/
- One Medical: www.onemedical.com
- Steve Jobs: en.wikipedia.org/wiki/Steve_Jobs
- Apple: www.apple.com/
- TH-cam: www.youtube.com
- Netflix: www.netflix.com/
- Study: play.google.com/store/apps/details?- id=com.thesoundagency.study&hl=en_ZA&pli=1Shopify: www.shopify.com/ph
--------------------------------
Connect with Kristen Berman:
--------------------------------
- LinkedIn: www.linkedin.com/in/kristenberman/
--------------------------------
Connect with Mark Stiving:
--------------------------------
- Email: mark@impactpricing.com
- LinkedIn: www.linkedin.com/in/stiving/
VISIT THE IMPACT PRICING PODCAST for Full Show Notes and Resources:
impactpricing.com/podcast/
มุมมอง: 10
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I searched “who sets the prices of Walmart inventory” to get here. That says a lot about me as a person & you as the video creator. This is EXACTLY what I was looking for. You know why I asked. Help me 🙏🏽Please, don’t hurt me ❤️❤️❤️
Underrated podcast!
WTP = competitors price + the value of my advantages - the value of my competitors advantages how to calculate the the value...?
I cannot imagine how to handle it in reality?
Can you show me an example how to calculate it?
data
❤️ *Promosm*
I had so much fun watching this. Thank you for sharing!
Can this strategy be used in a retail business
Absolutely, but be careful. Some bars have ladies nights where women drink free. Some restaurants here in Reno offer discounts to locals. The key is first determining who will pay more, and then figuring out a mechanism to get the discount to the deserving group without upsetting those that pay more.
@@mstiving okay! But I sell physical products am into sanitary wares business and pricing as been challenging, I need tips, Thanks.
I love retail pricing pondering✨
I loved the conversation and well done mate - Karan Sood
How about "The CEO's weapon to 'maximizing' profits" instead as the sub title?
👍
Promo*SM
This is a Fork! Thanks!
Very impressive, way to go Michael!
"Customers only trade money for value"
This is great!
Long overdue interview. As a B2B SaaS pricing software consultant, our strategy has always been , no long term contracts, opt out at any time with a 30 day notice. If clients aren’t getting value, then you really don’t want them to use the service. Outcome: You get a long term client who will always have the option to end the subscription when the perceived and or financial value is no longer measurable or desirable.
Thanks, Dick. I love hearing from Robbie. I'm glad you make it easy to cancel.
We’ve talked about the types of company that should or should not seek product-led growth, but what about the types of product? Seems like product-led growth is more applicable to the software world, what about B2B hardware especially if the product cost is high?
You can use PLG for hardware if your hardware has built in features that are turned on and off via software. I've heard every Tesla Model S is identical, but the capabilities are turned on and off.
@@impactpricing8081 thank you!!
We’ve talked about B2B software in most of the value-based pricing conversations, but what about B2B hardware such as servers, workstations, etc? Is value-based pricing still a good way to price these products? How do you measure the value from these products?
YES! I define VBP as simply charge what a customer is willing to pay. The key is knowing how your product is different from your competitors, and making sure you get paid a little more for that differentiation.
@@impactpricing8081 appreciate these insights!
@@ranwang707 Hi Tiffany, I post a lot of free content on LinkedIn (and have many more conversations there), but I don't see you as one of my connections. Would you please send me a connection request? There are many Tiffany Wongs there, and I don't know which one is you.
I'm a woodworker and have had several clients upset with updated pricing. Mostly due to material costs. One client asked why my pricing had gone up for a similar service that I had done in 2016. Ack! We had to have a discussion about the raised rates and he then agreed that he just couldn't afford it. So I'm glad you stopped to reiterate "If a client has raised their rates, they'll be more likely to accept your new rates". I paraphrased as that wasn't the exact quote, yet still very valuable in business dealings. This was an informative video. Thank you!
Thanks for sharing your experience, James. Raising prices isn't fun or easy.
Thanks :)
Thank you so much for sharing! Looking forward to reading your book: Selling Value.
Great advice Mark. Do you help clients get more success “stating the fact”?
Thank you for doing this. This is invaluable to the small business owner without expertise on pricing. Thank you!
This is very informative! Learned a ton. Thanks for putting it together
Please add subtitles
I disagree. The normal ratio of GBB is usually 60 Good /30 Better /10 Best. That is calculated based on the sales history. Otherwise great clip but needs more information and analysis.
Thanks for the comment. Where did you get your data? I've found your ratios are more appropriate for subscription products. This presentation was to speakers where they are usually selling one product at a time.
Ty
Bring back
Ty
Another great video! Keep’em coming. Looking forward to more great content in the coming new year.
Brilliant Mark. I love this. Too many people are already giving a discount before they even start to say their price.
r1g2v vyn.fyi
Nice episode. Podcast link isn't working though. Seems to be opening as a HTML document.
Sorry about that. Please try this link: impactpricing.com/resources/podcasts/
@@impactpricing8081 Yeah, that works thanks. I noticed it did the same on some other episodes so worth checking through on others too to update the link.
@@impactpricing8081 and always worth editing the link in description on this vid too.
@@TourmalineFilms Thanks. We will either update all of the show notes, or possibly just redirect that URL to the real URL. Cheers, Mark
Jon Jennings is so inspiring. Thanks for this interesting interview.
I agree he is amazing.
Interesting interview with Maciej Kraus. Thank you
Thanks for listening
Love this message! I'm in!
Great conversation!
Scenario: So if the government is looking for example 10 horse shoes with specs and I have a B2G company for products and service. I located a 10 horse shoes that were sold by a company call “shoes are us” in Texas that meet government specs. So it would be illegal to purchase those shoes and sell them to the government?
Why do you say it is illegal? It has been over 18 months since I recorded that podcast. Please remind me what was said. :-)
@@impactpricing8081 thanks for responding. I was framing the question in relations to my situation should I decide to deal in Government contracting. I just retired from the Army and want to be my own boss. Your video has been most helpful.
Link to the mentioned podcast: impactpricing.com/podcast/ep60-is-behavioral-economics-a-manipulation-game-to-retain-and-expand-customers-with-bri-williams/
This also reminds me your point on commodity: “there is no such thing as a commodity”
Thanks for continuing
Great 👍🏻
Please continue :)
Thanks for your comment Alexander. I will do more over time. Cheers
Please continue :)
great video bro
Amazing channel!! Keep up the great work! Do you know of smzeus”dot”com?! It will help your videos rank higher in the search results!