Patrick Lefler

Surge pricing: What a difference a year makes

When Uber rolled out surge pricing during the 2012 New Year holiday, the feedback from customers was terrible. A year later, they utilized the same pricing model with a much kinder reception. So why the difference? It turns out that if you properly communicate...

ChangeThis: One year and 6,700 downloads later

One year and over 6,700 downloads later, "Five Rules for Pricing Excellence: Getting the Most for Your Services" has become one of the most popular ChangeThis manifestos to date. To all who have downloaded and viewed our eBook over the past twelve months,...

If prices were raised today, how would your customers react?

How well do your salespeople know their customers? No, I'm not talking about knowing basic customer information or buying habits. Rather, I'm talking about knowing how each customer will react to price changes for each product or service he or she currently consumes. It's...

A different look at pay-what-you-want pricing

The concept of pay-what-you-want pricing is quite simple. Rather than setting a fixed price, sellers instead ask each buyer to pay whatever price they feel is appropriate for the object or service. In some cases, a minimum price ("floor") or suggested price may be...

Google Shopping Express to attack Amazon Prime: Will Jeff Bezos care?

According to a recent TechCrunch story, Google is set to go after Amazon's Prime Service that for $79 annually, gives Amazon customers unlimited movie and TV streaming, (free) access to the Kindle Owners' Lending Library, and free two-day shipping on most everything bought on...

My thoughts on Groupon and the recent firing of CEO Andrew Mason

My thoughts on Groupon and the recent firing of CEO Andrew Mason were published Friday in Jason Hahn's DM Confidential article titled, What Groupon's Firing of Andrew Mason Means for the Company and the Daily-Deals Industry. On Thursday, Groupon booted Andrew Mason from his seat...

Dodge Dart sales – overpowered by the paradox of choice

After its highly publicized launch a year ago, the Fiat-designed Dodge Dart has been a sales flop. With all the fanfare highlighting of its Fiat roots, Chrysler was looking for the car to give it a foothold in the competitive, but highly desirable compact-car...

Dynamic pricing and the death of PeopleExpress

Perhaps one of the most annoying aspects of traveling by air. With thousands of different prices for a single flight—most of which don't seem to make any basic economic sense—it almost requires a Ph.D. in quantitative statistics to fully understand the basic concept. But 30...

Does discounting increase customer loyalty?

In a recent Wall Street Journal article that highlighted the real-time price war being fought between traditional brick-and-mortar stores and their online competitors, an interesting comment was made by one of the big box giants. Black Friday, with its deep discounts, isn't good for profits....

Listening to customers is worthless; observing their behavior is priceless

Customers are notoriously bad at communicating. On second thought, I take that back. There're actually quite good at telling us what they think they want. What they're not good at is figuring out (and communicating) the things they're willing to pay for. And the...

The power of scarcity

In their book Yes! 50 Scientifically Proven Ways to Be Persuasive, authors Noah J. Goldstein, Steve J. Martin and Robert B. Cialdini tell the story of an unexpected sales event that occurred in 2003. "In the year 2003, there was clearly one car line that...

The innovative genius of Cyrus McCormick

Cyrus McCormick—best known for having invented the first mechanical reaper in 1833—was actually not the first. That honor went to Obed Hussey, who announced construction of his reaper a year before McCormick patented his in 1834. So while the argument can be made that...

Wishful thinking is the greatest enemy for startup ventures

It has been said that in warfare the greatest enemy of victory is wishful thinking. The same can be said for today's startup ventures. In its most basic definition, wishful thinking stands for "believing in something because of a desire for it to be true."...

Strategy lessons from Guadalcanal and the Battle of Savo Island

Seventy years ago this week, U.S. Marines under the command of General Vandergrift landed on Guadalcanal – the first major offensive by allied forces against the Japanese. While the initial assault was relatively unopposed by Japanese forces, the Marines spent the next six...

The myth of first-mover advantage

First-mover advantage is a myth. The worlds of science and business are filled with the names of people who were the first to discover a principle or invent a new process. They are celebrated as pioneers and great thinkers. Unfortunately, they were not always...

Anchors Aren’t Just for Ships

Rule #1 of our recently published ChangeThis manifesto... A few years ago, Williams-Sonoma, the high-end American retail company, offered a home bread maker priced at $279. After a period of mediocre sales, they decided to add a second model—similar features as the first but slightly...

Choices, more choices and too many choices

This is the week that Chrysler is set to begin an all-out advertising blitz for its newly developed subcompact – the Dodge Dart. Hoping to complete against the likes of Toyota, Honda and Hyundai, they have positioned the car to appeal to younger drivers...

The downside of dynamic pricing

We've talked about dynamic pricing before – most recently here when we described this pricing model's recent uptake within Major League Baseball ticket sales. For those who may need a reminder, dynamic pricing is an algorithm-based pricing model where the face value of every...

Most customer surveys are useless; here are five reasons why

Customer surveys tend to be highly touted representations of a company's commitment to improving customer satisfaction; they purportedly do this by extending the creative process of product improvement to the company's support base. However, the fact is that most surveys – by far –...

An “all-you-can-eat” pricing model for the airlines.

I missed the initial announcement two months ago, but a new startup airline—Surf Air—claims to be the first airline to exclusively adapt the all-you-can-fly pricing model. While the airline is not due to launch service until this coming summer, Surf Air claims that...

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