The Psychology of Price: How to use price to increase demand, profit and customer satisfaction

Common sense, not just mathematics, corroborates this principle. If your product delivers 20 % more value than the competitors’ products, you should collect 10 % of that difference in price. If you demand more—or demand it all—the customer actually never gets to enjoy the difference in value. If your value difference is 20 % and your price differen

The more a product is differentiated along a dimension consumers care about, the higher price premium it can demand.

higher value to customer which supports higher prices.

Ideally, no more than a quarter of your customers should opt for the good option, while 70 percent should opt for the better or the best. Why does a well-crafted G/B/B configuration/bundle work? Because you can steer customers to a choice based on whether they are price conscious (good), quality conscious (best), or somewhere in between (better). T