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Pricing misconceptions (video)

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Pricing misconceptions (video)

“Most publishers have relied on gut feeling or what their competitors are doing who also rely on their gut feeling,” he says. These false assumptions about readers’ decision behaviour are leading to wasted margins, he says.

Some of the classic mistakes publishers make when contemplating a price increase, for example, include:

  • justifying the increase by explaining it to their consumers, which only raises  awareness unnecessarily;
  • increasing page counts and more content that actually leads to more cancellations;
  • not raising prices during difficult economic times, or even
  • waiting to adjust prices until it is too late.

When talking about e-publishing products, he says news publishers must develop readers’ willingness to pay as there is no pre-existing willingnes for an unknown product. They have to develop a readership habit as well.

Some of the factors and advice to take into consideration for print include:

  • Always optimising and researching price rather than the gut-feeling approach.
  • “Price sensitivity is not something stable – publishers have to challenge and develop it – think of price sensitivity as being a muscle: If you don‘t train and challenge it, it won‘t get stronger!”
  • “The unexploited potential of today can never be recovered. It is lost forever.”

As to e-publishing, he says it is not about content. It‘s about developing a new habit – in every respect: price, payment and product. E-publishing has to be developed outside-in – publishing houses must learn to listen, “maybe for the first time ever!”

And publishing houses need to start thinking in portfolios instead of silos. “They have to differentiate, explain and manage product and price portfolios to leverage the opportunities of bundling and upselling effectively.”

You may download Mr Bauer's presentation on slideshare.

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Author

Dean Roper's picture

Dean Roper

Date

2012-09-04 12:54

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