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Experimentation with pricing can reveal customer willingness to pay from "summary" of The Customer-Funded Business by John Mullins
Pricing experimentation serves as a vital tool for understanding how much customers are prepared to spend on a product or service. By varying prices and observing customer reactions, businesses can gain valuable insights into their target market's preferences and value perception. This process allows companies to identify the optimal price point that maximizes both sales volume and profitability. Different pricing strategies can be tested, such as discounting, bundling, or tiered pricing. Each strategy can attract different segments of customers, thereby revealing their willingness to pay. For instance, offering a premium version of a product alongside a basic option can illuminate how much additional value certain customers assign to enhanced features. This n...
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