Pricing research – when to use it and how to improve it

By Nicola Warrington

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There was an interesting article last week in Research Live about the gamification of pricing research arguing that traditional approaches need to be more engaging in order to improve data quality, limit respondent bias and reduce the rationalisation of responses. Improving traditional approaches and respondent engagement can only be a good thing but the underlying principles for pricing research remain.

Choosing the right methodology requires a clear understanding of your objectives – whether that be at the beginning of the process and assessing the importance of price in driving brand choice, through to identifying the optimal price range or estimating purchase intention once a price point has been set.

Below are three traditional pricing research methodologies, when to use them and our thoughts on how gamification can be used to enhance them:

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Driving revenue via dynamic transport pricing

Business Issue

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Our client needed to drive additional revenue from their transport offering.

Prior to the introduction of a dynamic pricing model to maximise revenue and capacity, an understanding of the price sensitivity of different passenger types was essential.

Insitas Delivered

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Insitas established the price sensitivity for each of the user groups, highlighting psychological trigger points  along with maximum and minimum price points.

The impact ticket price had on the likelihood to re-use and overall service satisfaction was also analysed to understand the trade off between short term gains and longer term brand growth.

Actions Taken

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A short term limited promotional price offer was introduced, containing strict eligibility criteria to ensure it could only be accessed by the target group.

The success of the trial led to a wider roll out of a new more tailored pricing model.

Building revenue through tailored promotions in the leisure sector

Business Issue

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Our client wanted to build brand engagement and ultimately revenue in a market where promotional offers are pivotal to driving incremental spend.

They wanted to introduce a tool which would enable customers in different countries to tailor the frequency and content received, as well as the communication channel used.

Insitas Delivered

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Insitas showed that there was both a strong desire for such an approach and that it would create increased brand engagement.

We identified appropriate content and the parameters within them to prove viability.

Cultural differences meant that content selections varied, and different revenue targets were recommended.

Actions Taken

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Our client refined the content preferences, taking into account national sensitivities identified by Insitas.

Our insight informed decisions on the frequency options to be made available to customers.

Finally they developed the means of delivering the tool along with clear guidelines and instructions for use.