Understand Your Buyer > How To Convert > Adaptive Pricing
What is it?
Adaptive pricing is simple when pricing changes depending on certain conditions – often time or level of demand.
Why does it work?
It works because it helps both the seller to maximise how much profit they make and to capitalise on demand when it exists. It also helps buyers by offering a lower price point at certain times or levels of demand. In this way you are making your offering more accessible to different buyers at different price points but without the need to “discount” necessarily.
How can you use it?
This doesn’t work for all business models and you either need to make two decisions as to how you will implement it.
1 – Time. The simplest of the two options is to have a lower price point at fixed times. It’s easy to manage and sets the expectation with the buyer.
2 – Demand. This may require technology to help you implement it, but, like Uber and their “surge” pricing, your pricing can be greater at levels of higher demand and lower at times of lower demand.