Myth Busting: “Dynamic pricing is only used to charge consumers more”

rich monopoly

Nope. We do dynamic pricing to show each shopper the right price. That’s the price they want to pay for your product. Sometimes its higher. Other times its lower. That’s how our dynamic pricing grows your revenue.

Dynamic pricing can produce counterintuitive results. For example, our data shows that lower prices cause rich people to spend more money.

Why? How?

It turns out that offering rich people a lower price generates better conversions + higher lifetime value = more money for you.

What could explain this? Maybe, “Rich people are tight asses.” But what about the idea that rich people spend more on everything they buy (cars, houses, vacations, clothes, cheeses, dogs, etc.)?

The only way to know whether rich people are tight asses or big spenders is to test. Using science.*

At Vendo we have millions and millions visitors in the “rich people” category in the US. Over the last twelve months we gave them low prices and high prices. We counted how much money our clients made. Simple revenue. Nothing fancy. The result? Lower prices made more money.

We can theorize and hypothesize (we do that a lot) but it doesn’t change the data. When you offer rich people a lower price they spend more money.

So, let’s bust the myth…


“Dynamic pricing is only used to charge consumers more.”


Dynamic pricing gives customers the prices they want to pay

(and makes you more money).

Of course, we don’t only look at wealth. A shopper is a combination of many interacting variables and that are constantly changing. Want to know more? Check out Clay explaining how we do dynamic pricing here:

* Very large samples, randomized, statistically significant result.

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