Myth Busting: “Shop owners know the best price for their products”

http://blog.vendoservices.com/vendo-blog/2016/04/21/myth-busting-shop-owners-know-the-best-price-for-their-products

price??

Here’s a myth that the dinosaur billing companies have been spreading lately. “Shop owners know the best price for their products.” We’ve yet to meet a shop owner who thought that they were great at pricing. But our dying, non-adaptive friends in billing are trying to spread this myth. Fine. We’ll give it a quick “busting.”

The fact is that shop owners know their costs. Better than anyone.

What they don’t know is the best price for each shopper. How could they? Any small to medium sized client of Vendo’s can have 100,000 visitors a day to his shop. That’s more than one per second. All those visitors are different. How could a shop owner know which price to give each one of them?

Here’s what a shop owner is missing:

Access

Access to data on each shopper from across the industry (shop owners only have their own data)

Access to prices competitors offer (competitors don’t share this data)

Tools

Artificial intelligence to analyze billions of combinations of user profiles and product attributes (no combination of nerds and spreadsheets will help, it’s got to be AI).

AI to measure the effect of each price on revenue (conversion and lifetime value) for each visitor.

AI to deliver the best price to each visitor, multiple times per second (no human can keep up with the variety of visitors and how quickly they show up).

So, let’s bust this myth:

MYTH

“Shop owners know the best prices for their products”

FACT

Shop owners know their costs but they cannot know the best prices.

Our clients set price floors (ex. Not below $20 for a monthly membership) to make sure they are covering their costs. Then they use Vendo’s AI to set the best price for each shopper. They don’t risk choosing prices without access to the right data and tools. That would kill revenue. Only a dying business, stuck in the past, would recommend it.

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