Dynamic Price Adjustment Techniques

Static paywalls are leaving money on the table; intelligent pricing is how publishers reclaim it. Fixed paywalls block access and revenue potential. Relying on static pricing risks falling behind competitors like Schibsted, which saw a 19% increase in average revenue per user (ARPU) after adopting dynamic pricing (INMA, “Dynamic Paywalls Gain Momentum”, 2023). Traditional paywalls offer the same deal to every user, but not all readers are the same. Behaviour, loyalty, and content value vary, and a one-size-fits-all approach ignores these critical factors. This rigidity limits revenue yield and risks losing high-value audiences to more agile publishers. How AI-Driven Paywalls Maximise Revenue Yield Dynamic pricing, powered by AI, allows publishers to adjust subscription offers based on real-time user behaviour and perceived content value. Here’s how: ✅ Behavioural Targeting:  The Dallas Morning News increased conversions by 28% by offering discounts to frequent readers and trials to casual visitors (INMA, 2023). ✅ Content Valuation: The Financial Times uses dynamic pricing to align fees with content value, a strategy that contributed to a 14% YoY digital subscription growth (FT Group Annual Report, 2023). ✅Predictive Adjustments: Amedia reduced bounce rates by 18% using AI-driven exit-intent discounts (Reuters Institute, “Journalism, Media, and Technology Trends”, 2023). Instead of setting prices in stone, publishers use intelligent signals to flexibly match user willingness to pay, unlocking hidden revenue pockets. Three Practical Steps to Smarter Paywall Monetisation ✓ Audit Current Paywall Performance: Identify weak points like high drop-off rates or low conversion on high-value articles. ✓ Implement AI Segmentation: Use machine learning models to predict engagement and optimise when and how offers are shown. ✓ Define Dynamic Pricing Rules: Allow prices to shift based on real-time behaviour, content consumption trends, and traffic patterns. AI-driven dynamic paywalls aren’t about squeezing users—they're about aligning subscription offers with actual user value and intent. Early adopters have seen 20–35% higher conversion rates and up to 15% lift in average revenue per user (ARPU).Static pricing is no longer sustainable for publishers aiming to maximise revenue yield. Intelligent pricing strategies are the future. Here are key takeaways: 1. Static paywalls limit potential revenue growth. 2. AI-driven paywalls tailor offers based on user behaviour and content value. 3. Dynamic pricing improves both conversion rates and ARPU. 4. Publishers must audit, segment, and dynamically adjust pricing strategies to stay competitive. It’s time to audit your pricing model. If it can't adapt, your revenue won't, either. Is your paywall strategy optimised to maximise revenue yield in 2025? Share your thoughts with me in the comment section. #AIMonetization #DigitalPublishing #PaywallStrategy #SubscriptionRevenue #PublisherRevenue

Pricing Analysis: Pricing is more than just setting a number—it’s a strategic lever that directly impacts profitability, market share, and customer demand. Yet, many businesses either price too high (losing customers) or too low (leaving money on the table). So, how do you analyze and optimize pricing using data? 1️⃣ Cost-Based Pricing: Cover Your Costs First Ensure your price covers both fixed and variable costs while maintaining a healthy markup. 📌 Formula: Selling Price = Cost + (Cost × Markup %) ⚠️ Pitfall: This method ignores competition and customer perception. 2️⃣ Competitive Pricing: Know Your Market Position If competitors price lower, do customers perceive them as "better value"? If you price higher, can you justify it with brand or features? 📌 Price Difference % = ((Your Price - Competitor Price) ÷ Competitor Price) × 100 ✅ Action: Collect competitor pricing (via web scraping or market research) and adjust accordingly. 3️⃣ Profit Margin & Break-Even Analysis Before setting discounts, understand how price changes impact profitability. 📌 Profit Margin % = ((Selling Price - Cost) ÷ Selling Price) × 100 📌 Break-even Price = (Fixed Costs ÷ Sales Volume) + Variable Cost per Unit ⚠️ Warning: If your price is near break-even, excessive discounts can erase your profits. 4️⃣ Price Elasticity: Will a Price Change Affect Demand? If you increase the price by 10%, will demand drop by 5% or 20%? 📌 Price Elasticity = (% Change in Quantity Demanded ÷ % Change in Price) ✔️ Elasticity > 1 → Demand is sensitive to price (luxury items, non-essentials). ✔️ Elasticity < 1 → Demand is insensitive (necessities, brand-loyal customers). ✅ How to measure? Look at historical data, conduct A/B tests, or survey customers. 5️⃣ Dynamic & Tiered Pricing Strategies Smart businesses use data-driven pricing to adjust prices based on demand, seasonality, and customer behavior. 💡 Examples: ✔️ E-commerce platforms use real-time pricing based on competitor trends. ✔️ Subscription businesses offer tiered pricing for different customer segments. ✔️ Retailers adjust prices based on demand fluctuations. ❓ How do you approach pricing in your industry? Let’s discuss in the comments! 🚀 #Pricing #DataAnalytics #BusinessStrategy #PriceOptimization

Despite pricing being the most powerful business lever for growing Operating Profits, many mid-market companies still rely on static, cost-plus formulas to generate prices, missing key opportunities to drive higher profits on both ends (leaving money on the table and missed sales opportunities). Price optimization is built on advanced analytics, including AI and machine learning, to set prices that maximize profitability while aligning with broader business objectives (i.e., balance revenues with gross profit $). It leverages transactional and market data to deeply understand customer behavior and adapt to changing inputs (i.e., competitor prices, inventory levels, seasonality, etc.). Whether you’re in manufacturing, distribution, or retail, some form of an insights-driven, dynamic, and automated pricing strategy is essential for profitable growth. In the below article (see comments), we explore foundational pricing methodologies such as dynamic pricing, value-based pricing, and competitor-based pricing: 1. Dynamic Pricing: Adjust prices in real-time (or near real-time) based on competitor actions, inventory levels, market trends, and financial goals. Amazon’s dynamic model exemplifies how real-time adjustments can balance a low-price reputation with margin optimization. 2. Value-Based Pricing: Set prices on perceived customer value rather than costs or competitors. This ensures your pricing reflects the unique differential value you provide. A simple approach is assigning a competitive price index premium based on detailed customer research. 3. Competitor-Based Pricing: Position products strategically by considering competitors’ real-time prices. Techniques like premium pricing, price matching, and loss leader pricing help assign the right comp-pricing strategy to each customer or product segment. Successful price optimization requires avoiding pitfalls. Overcomplicating pricing models can lead to inefficiencies and erode trust among commercial teams—we’ve seen this too often. Relying on opaque “black-box” AI systems can also cause a loss of control and transparency. The key is balancing sophistication with simplicity, ensuring strategies are effective and embraced by the sales team. Building or insourcing your price optimization capabilities offers significant advantages. It aligns your pricing with business goals, provides greater decision control, and strengthens long-term pricing acumen. You can create a robust, customized pricing engine tailored to your unique needs by fostering collaboration across teams and continuously refining your models. Mid-market companies have a unique opportunity to elevate price optimization from a tertiary (or non-existent) concern to a core business function. Achieving this requires a deliberate, thoughtful approach that leverages advanced analytics, your internal/external data assets, and a collaborative approach with your Finance/Pricing and Commercial teams. #revenue_growth_analytics

Dynamic pricing is an effective tactic to increase conversion and revenue for subscription products. When I first tested dynamic pricing while leading subscriptions at TechCrunch, we were able to increase conversion rate by 22% while also increasing 1-year estimated LTV. Here's how we did it: 1️⃣ Identify what impacts conversion We investigated which variables were most strongly associated with conversion, and we found 10 variables (see the first image). We then used a machine-learning algorithm to score all users from 0-100 based on the criteria. 2️⃣ Create marketing segments We used the scores to create marketing segments based on the likelihood to subscribe score. We could have created 100 segments, but that’s overly complex for a first test so we simplified it into three groups to reduce scope (low, medium, and high). We referred to the score as the LTS score, or “likelihood to subscribe” score.  3️⃣ Develop hypothesis and run an experiment Our hypothesis was that segmenting with price differentiation would lead to a higher conversion rate and higher LTV than a static experience. We ran an experiment where users with a medium and high likelihood to subscribe score received a higher trial price point ($5 first month), and users with a low likelihood to subscribe score received a lower trial price point ($1 first month). See the second image for the test plan. 4️⃣ Analyze the data We looked at conversion volume, conversion rate, and gross revenue, and then modeled the estimated LTV for 1 year. Revenue and LTV numbers are intentionally removed from the image for LinkedIn sharing. Shown in image 3, the results were:  *Using dynamic pricing led to a 22% lift in conversion and higher revenue than a static paywall experience.  *Conversion rate for the medium and high score segment was 2.5x higher than the average of all other segments. The test was initially a success. It also created ideas for follow up tests and analysis. Some of the smartest subscription businesses take a similar approach. For example, The New York Times uses a machine learning algorithm to create a "dynamic meter." Every user gets a slightly different experience with the meter in order to optimize and balance engagement and revenue. Are you taking advantage of dynamic pricing to optimize revenue for your product?

According to our annual State of the Industry report, 80% of lead buyers are still paying fixed prices for their leads, even though this is not the most optimal way of acquiring leads. When you compare the KPI success rate of lead buyers using fixed pricing with those using dynamic pricing, the difference is hard to ignore. Only 41% of lead buyers using fixed pricing are hitting their KPIs, while 81% of lead buyers using dynamic pricing are. In other words, dynamic pricing doubles your chances of hitting your goals. So what exactly makes dynamic pricing twice as effective? Not all leads are created equal. So why are we still pricing them like they are? If a lead is more likely to hit your KPI, you bid more. If it’s less likely to hit your KPI, you bid less. That’s the principle behind dynamic pricing. When acquiring leads through dynamic pricing, you take into account: the channel the lead comes from (for example, social or search), the quality of the publisher generating that lead, the zip code, the lead source history, etc. And you use this data in real time to optimize a bid for each lead that reflects how much that specific lead is worth to you. It continually refines your lead bids based on what actually converts and what doesn’t, learning from your disposition data and automatically optimizing to hit your KPIs.

𝗪𝗮𝗹𝗺𝗮𝗿𝘁 𝗧𝗿𝗮𝗻𝘀𝗳𝗼𝗿𝗺𝘀 𝗥𝗲𝘁𝗮𝗶𝗹 𝘄𝗶𝘁𝗵 𝗗𝗶𝗴𝗶𝘁𝗮𝗹 𝗣𝗿𝗶𝗰𝗲 𝗧𝗮𝗴𝘀 𝗮𝗻𝗱 𝗔𝗜-𝗗𝗿𝗶𝘃𝗲𝗻 𝗗𝘆𝗻𝗮𝗺𝗶𝗰 𝗣𝗿𝗶𝗰𝗶𝗻𝗴!🛒📲 Last Friday, I was asked after my masterclass how mass market retailers could improve customer experience (CX) as brands are currently doing in the fashion industry. We briefly discussed how Walmart is once again leading the charge in retail innovation. These types of retailers are more like convenience stores, and the approach should be to make the consumer shopping experience easier and seamless. A prime example of this innovation is Walmart's upcoming implementation of digital price tags. By 2026, 2,300 Walmart stores will replace traditional paper price tags with digital price tags, revolutionizing the way prices are managed and updated. This is a game-changer for CX and operational efficiency. 𝗞𝗲𝘆 𝗜𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻𝘀 ⏱️ Rapid Price Updates:  Over 120,000 items can have their prices updated in mere minutes, compared to the two days it previously took with paper tags. All done with just a few clicks via the 𝗠𝗲@𝗪𝗮𝗹𝗺𝗮𝗿𝘁 𝗮𝗽𝗽 📈 Dynamic Pricing with #AI:  The AI analyzes market trends, demand, and competition to adjust prices instantly. This means prices can be optimised to reflect current market conditions, maximising sales and #inventory efficiency. 🚀 Enhanced Customer Experience:  Faster and more accurate pricing ensures customers always see the correct price, enhancing trust and satisfaction. 🛍️ Efficient Order Fulfillment:  Employees can pick items for online orders more quickly, improving the speed and accuracy of order fulfillment. 🌱 Sustainable Innovation: Reducing paper use contributes to Walmart's sustainability goals, promoting a greener retail environment. 𝗛𝗼𝘄 𝗔𝗜 𝗗𝗿𝗶𝘃𝗲𝘀 𝗗𝘆𝗻𝗮𝗺𝗶𝗰 𝗣𝗿𝗶𝗰𝗶𝗻𝗴? 🔮 Predictive Analysis:  AI analyzes historical and current data to foresee changes in demand and market behavior, enabling precise price adjustments, just as Amazon has been doing for ages. 🤖 Machine Learning:  Algorithms continuously improve by identifying patterns and trends to optimize prices. 📊 Big Data:  AI handles large volumes of data from various sources to adjust prices in real time. 📈 Real-Time Competition Monitoring:  It tracks competitor prices and adjusts Walmart's prices automatically to stay competitive. 🎯 Personalisation:  Offers personalised prices based on customer purchasing behaviour, this could be done only online of course. 💡 What are your thoughts on the adoption of AI-driven dynamic pricing in retail? #RetailInnovation #CustomerExperience #DynamicPricing #Walmart #DigitalTransformation #RetailTech #Sustainability #CX

Pricing Finally Makes the Headlines! 🚨 When Pricing Gets Its Own Tabloid Cover, You Know It's Serious Business! Dynamic pricing is becoming widespread across industries, from ride-hailing to events. Yet, when applied poorly, it can spark serious backlash. Just look at the Oasis ticketing disaster—prices shot from £135 to £355, leaving customers furious So, how can you use dynamic pricing effectively to increase revenue while keeping customers on board? Let’s explore some key strategies: 1. Transparency Is Critical Customers hate surprises. Being upfront about how and when prices will change is the first step in building trust. Uber mastered this by clearly showing surge pricing and explaining the rationale behind it. This transparency allows customers to decide if they want to pay more—or wait Tip: Always give customers visibility into pricing patterns before they hit ‘buy.’ 2. Give Customers Options The Oasis ticket fiasco didn’t just fail because of price jumps—it failed because buyers felt trapped. Dynamic pricing works best when customers have control, like choosing between premium fast service or waiting for lower prices Tip: Let customers opt into different service levels based on urgency or budget, similar to how airlines offer economy and business class. 3. Use Technology, But Thoughtfully Dynamic pricing is powered by algorithms, but they must be applied in ways that feel fair. Amazon adjusts prices daily, but customers accept it because the changes are incremental, not shocking Tip: Keep price fluctuations moderate, and avoid extreme spikes that could alienate your audience. 4. Handle Price Surges with Care Sudden, dramatic price increases create frustration. Instead, implement predictable, moderate surges that customers can plan around. Offer price locks for early buyers to manage expectations Tip: Provide price-freeze options for early purchasers to ease anxiety over future increases. 5. Customer Education is Key Consumers tolerate dynamic pricing better when they understand it. Ride-hailing apps have found success explaining that higher rates during busy times ensure driver availability Tip: Use real-time messaging to explain why prices are changing, especially during peak times. Dynamic pricing doesn’t have to feel like price gouging. When done right, it’s a win-win for both businesses and customers. The secret sauce is transparency, customer choice, and smart, fair pricing algorithms. The key is ensuring that the customer feels empowered, not exploited. What has your experience been with dynamic pricing in your industry? Are you using it to its full potential, or are you still navigating the balance between profit and perception? Share your thoughts below!👇 ----- 📢 Curious about navigating the dynamic world of pricing and staying ahead of the curve? Hit the 🔔 icon and follow me to receive timely updates on pricing strategies, industry trends, and more!

Business Use Case for Data Scientists: How would you design a pricing strategy to maximize revenue for an e-commerce platform like Amazon or Walmart? 🤔 👉 Tackling dynamic pricing isn’t just about knowing a few pricing algorithms or throwing around buzzwords like A/B testing. In my latest article, I share three practical steps to approach this challenge: 1️⃣ Define the problem - Identify what to optimize for (revenue, customer retention, market share, etc.) - Ask what drives customer willingness to pay. - Identify what data is available (historical pricing data, demographics, etc.) 💡 Break it down: Pricing decisions should align with both customer behavior and business goals. 2️⃣ Choose the right approach - Use predictive models like gradient boosting to forecast demand. - Apply price elasticity modeling to determine optimal price ranges. - Incorporate real-time data for dynamic price adjustments. 💡 Think critically: What data and tools best capture these patterns? How will they scale to real-world complexity? 3️⃣ From predictions to decisions - Partner with marketing teams to target segments with tailored offers. - Leverage inventory insights to price strategically. - Validate strategies through simulations or small-scale rollouts. 💡 Insights are just the start. Value comes from how you apply them—whether it’s increasing revenue or improving customer satisfaction. ✅ If you’re preparing for interviews or want to understand how data science creates real-world impact, this framework will help you think like a business-ready data scientist (full article in the comments 👇)

Noticing that your Amazon channel is becoming unprofitable? 🤔   Adjusting your pricing strategy can be a powerful lever—but it’s crucial to approach it with a plan. 𝐒𝐭𝐞𝐩 𝟏: 𝐂𝐨𝐧𝐝𝐮𝐜𝐭 𝐚 𝐏𝐫𝐢𝐜𝐢𝐧𝐠 𝐀𝐧𝐚𝐥𝐲𝐬𝐢𝐬 Begin by assessing where your product stands in the market:  1. Use Excel to list your unprofitable product alongside 5–10 competitor products with similar quantities.   2. Compare their prices and note the general price range for similar items (e.g., 12 oz or 16 oz). 𝐒𝐭𝐞𝐩 𝟐: 𝐌𝐚𝐤𝐞 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜 𝐏𝐫𝐢𝐜𝐞 𝐀𝐝𝐣𝐮𝐬𝐭𝐦𝐞𝐧𝐭𝐬 • 𝐈𝐟 𝐘𝐨𝐮’𝐫𝐞 𝐔𝐧𝐝𝐞𝐫𝐩𝐫𝐢𝐜𝐞𝐝: Gradually increase your price in small increments to avoid losing the Buy Box. If you lose it, simply revert to the previous price, regain the Buy Box, give it a few days to cool down, and continue increasing in small steps toward your target.   • 𝐈𝐟 𝐘𝐨𝐮’𝐫𝐞 𝐎𝐯𝐞𝐫𝐩𝐫𝐢𝐜𝐞𝐝: Pricing may not be the root issue. Instead, look into your advertising performance, conversion rate, COGS, & supply chain. 𝐒𝐭𝐞𝐩 𝟑: 𝐄𝐱𝐩𝐥𝐨𝐫𝐞 𝐀𝐝𝐝𝐢𝐭𝐢𝐨𝐧𝐚𝐥 𝐏𝐫𝐨𝐟𝐢𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐋𝐞𝐯𝐞𝐫𝐬 • 𝐎𝐩𝐭𝐢𝐦𝐢𝐳𝐞 𝐀𝐝𝐯𝐞𝐫𝐭𝐢𝐬𝐢𝐧𝐠: Refine your targeting to improve ad efficiency and boost conversion rates.   • 𝐑𝐞𝐯𝐢𝐞𝐰 𝐂𝐨𝐬𝐭 𝐨𝐟 𝐆𝐨𝐨𝐝𝐬: See if there’s potential to lower costs through economies of scale or alternative manufacturers.   • 𝐄𝐯𝐚𝐥𝐮𝐚𝐭𝐞 𝐒𝐮𝐩𝐩𝐥𝐲 𝐂𝐡𝐚𝐢𝐧 𝐂𝐨𝐬𝐭𝐬: Identify any opportunities to cut expenses across your supply chain. Taking a comprehensive approach to profitability helps you avoid quick fixes like cutting ads, which can reduce visibility and hurt organic rankings.  Instead, focus on strategic adjustments for sustainable growth and profitability on Amazon. 📊💡 #Amazon #Pricing #profit #P&L #digitalmarketing  

Haven’t updated your menu prices lately? It’s costing you. In today's challenging economic landscape, regular price adjustments have become an operational necessity for restaurants. With fluctuating costs of goods, labor, and supply chain pressures, staying static can erode profit margins and undermine the customer experience. 𝐏𝐫𝐨𝐟𝐢𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐓𝐢𝐩 𝟖 𝐨𝐟 𝟏𝟎: Regularly adjust your pricing to reflect real-time costs and to protect your profit margins. 1. Understand Costs to Control Them Prices aren’t just numbers; they’re a reflection of your operating reality. Without a precise understanding of your Cost of Goods Sold (COGS) and the influence of market dynamics, you risk underpricing or overpricing. Weekly inventory checks are vital to track real-time shifts in your food and supply costs. 2. Dynamic Pricing Protects Margins Treat menu prices as a living equation tied to your costs. Regularly review your pricing to account for rising commodity prices, supply chain disruptions, or changes in portion sizes. Customers may notice and value transparency about why prices change rather than silent hikes or hidden cuts. 3. Customer Retention Through Value Instead of steep discounts, use strategic bundling or loyalty programs to emphasize value. Deals like pairing a best-seller with a new dish not only promote your offerings but also balance profit margins. 4. Small Changes Make Big Impacts A minor price adjustment can significantly affect your profitability. For example, a $0.25 increase on a popular item sold 1,000 times a month equals $250 in additional revenue—a buffer against rising costs. 5. Data-Driven Decisions Build Trust Leverage tools like POS systems and industry reports to understand customer behaviors and preferences. Align pricing strategies with your business goals while remaining sensitive to your customer base's willingness to pay. 💡 Pro Tip: Make a checklist of everywhere that your prices need to be updated, from POS to Catering Menus to Third Party Delivery Services. The days of static pricing are over. The key is not to increase prices arbitrarily but to do so informed by data, operational insights, and market trends. When was the last time you adjusted your pricing? #Restaurants #RestaurantManagement #RestaurantIndustry #Inflation #BusinessStrategy #CustomerExperience #Profitability