Feather Pricing Changes with Precision

Dropping prices dramatically can attract new customers. But it also has a clear potential to irritate current customers. Economists use the term “rockets and feathers” to describe how prices on many item rise quickly, but drop slowly. The economists’ explanations for rockets and feathers have to do with supplier costs and consumer search strategies.
      Lowering prices gently and with precision is a good way to ensure customers who visit your store often will continue to trust your pricing. Economists can still credibly use the word “feathers” to describe this pricing strategy, since one meaning of “feather” is to hit softly and precisely.
      Another meaning of the word “feather” is “to adorn as if to attract notice.” And that brings up a provocative suggestion: If you do offer substantial discounts, target the notice so that the loyal customers are less likely to discover it. Don’t adorn it with feathers.
      But research findings lead me to conclude this is a risky strategy. In year 2000, Amazon as a test of pricing strategy offered a discount of 30% to some customers, while others were offered a discount of 40%. When customers discovered online what was going on, they had challenging questions for Amazon.

Click below for more:
Search for Better Supplier Costs
Offer Exclusive Price Discounts Cautiously
Redirect Consumer Boycott Anger