Pricing Strategies
Demand Pricing
The C2B (Consumer-to-Business) Demand Pricing Model allows consumers to set prices for products or services they are willing to sell or provide, with businesses responding based on current market demand. This approach is particularly effective in environments where consumer offerings vary greatly in desirability and scarcity.
TYPES OF SOFTWARE
Platforms facilitating the sale of unique or high-demand consumer goods to businesses, such as collectibles, antiques, or rare items.
Services marketplaces where consumers offer bespoke or specialized services that businesses bid for, such as consulting, artistic performances, or custom manufacturing.
Digital asset marketplaces, where consumers offer rights or access to digital content like photography, music, or software, with businesses bidding based on usage needs.
BENEFITS
Job Type
CHALLENGES
Price Setting Skills: Requires consumers to have a good understanding of the market to set realistic prices.
Variable Income: Income from sales is highly unpredictable and can vary widely based on market trends and demand fluctuations.
Complex Negotiations: May involve complex negotiations, which can be time-consuming and require a sophisticated platform to manage effectively.
PSYCHOLOGICAL TACTICS
Scarcity and Value: Highlighting the scarcity and unique value of the offerings to drive up business interest and willingness to pay higher prices.
Dynamic Pricing Displays: Using dynamic displays that show how consumer pricing changes with demand can spur businesses to act quickly to secure a good deal.
Social Proof and Validation: Showcasing successful transactions and satisfied business customers can enhance the credibility of the platform and encourage more businesses to participate.
TESTING & FEEDBACK
Market Simulation: Running simulations or pilot tests to see how consumers set prices and how businesses respond, helping to refine the model based on real-world behaviors.
Direct User Surveys: Gathering direct feedback from both consumers and businesses on their experiences, pricing satisfaction, and platform usability.
Performance Metrics Analysis: Monitoring various metrics like sale completion rate, average price acceptance, and user retention to gauge the effectiveness of the pricing model.
IMPLEMENTATION
Guided Pricing Tools: Providing tools that help consumers set competitive prices based on market data and historical trends.
Transparent Process: Ensuring all aspects of the pricing and negotiation process are transparent and easy to understand to build trust and maintain platform integrity.
Robust Negotiation Features: Implementing advanced features for negotiation, such as counteroffers, automatic bidding, and instant price matching.
BEST FOR
C2B
FLEXIBILITY
Moderate
The demand pricing model can adapt to different types of consumer offerings and market conditions, but scalability may be limited by the niche nature and the need for active participation from both consumers and businesses.
REAL-WORLD EXAMPLE
Priceline’s Name Your Own Price tool, which was previously used for services like hotel bookings and airline tickets, is a classic example of C2B Demand Pricing. Consumers would name their price for a hotel room or flight, and providers could choose to accept or reject the offer based on current availability and demand. This model provided consumers with potentially lower prices while allowing service providers to fill capacity that would otherwise go unused.
View the collection of Pricing Workshops.