Pricing Strategies in a new world

I was reading an article on Mashable, which helps to explain how we should look at pricing decisions. Availability or ease of  purchase is also one part of the cost of a product or services. Unfortunately, this cost is often neglected when making decisions on pricing.

The “Radical Marketers” should focus on  two important issues here;

First, we should always put the ease of purchase portion of the costs in our decisions and strategies.

Second, we should not only focus to drop our costs just by focusing to decrease the price, but think about droping the costs by increasing the ease of purchase.

Online world is providing us many opportunities for improvements on the ease of purchase, and the “Radical Marketers” has to plan and execute on this front for a competitive advantage.

Below you can find portion of the article;

Time and time again I see the discussion about free content, free services, free products, and how they’re going to liberate/destroy/change the current economy, especially when it comes to the Internet. Often, one important point is neglected. When it comes to free, it’s not the price that’s crucial.

It defies logic: after all, if you offer someone a free donut, he/she is going to take it because the price is zero, right? Well, not exactly. In the online world, there’s another equally important currency: availability. It can be defined by the number of steps it takes to do something or download some content. The bigger the number of steps, the bigger the cost of the product/service.

In case the idea is not very clear, I advise the full article; You Think ‘Free’ is About the Price? It’s not..

Using irrational behavior in Sales & Marketing

Behavioral economist Dan Ariely, the author of Predictably Irrational, uses classic visual illusions and his own counterintuitive (and sometimes shocking) research findings to show how we’re not as rational as we think when we make decisions. You can watch his fascinating video above (from TED).

I think irrational behavior is something that all the marketers and sales people have to learn and excel. These ideas comes to good marketers intuitively, but sometimes it is hard to explain the teams involved with marketing. Dan Ariely brings a great framework for the decision process, which should be an important part of the sales and marketing teachings.