Our story of how Modern Pricing came to be and our vision for the future.
How much will customers pay?
This is the seemingly simple question that puzzled the founders of Modern Pricing when they were working together at a top online education company. They realized that accurately answering this question would boost the company's profit faster than increasing volume would; however, if they couldn't, the wrong price would shrink it just as quickly.
The best practice at the time was to settle pricing somewhere in the middle: a price high enough to generate profit but low enough to be attractive to a large portion of potential customers. Despite finding the sweet spot—the equilibrium—there would be sacrifices. The company would lose profit from both customers who were willing to pay more and also customers who did not purchase because the price was slightly too high.
To maximize the revenue of the company, they would need to find a way to answer a slightly different question:
How much will each individual customer pay?
This important distinction would enable them to charge all customers the highest amount they are willing to pay.
Modern Pricing is their answer to this question.
They developed an algorithm that considers the unique characteristics of each individual in real-time—without sacrificing privacy—and then returns a score that recommends how much the individual will pay. With a personalized score, companies are able to change from static to dynamic prices nearly overnight—helping them capture lost revenue at both ends of their customer base.
The outcome of Modern Pricing is clear: personalized-pricing leads to more profit.
With an unmatched risk-effort-reward profile to go along with it, implementing personalized-pricing may be one of the most promising yet overlooked opportunities for your company. Create an account to get started.