BradPace.com

Pricing elasticity is defined as “In economics and business studies, the price elasticity of demand (PED) is an elasticity that measures the nature and degree of the relationship between changes in quantity demanded of a good and changes in its price.” At In2M we experimented with the cost of our subscription service several times and found that we could charge more and not have it effect our conversion rate. People where willing to pay more.

But there are limits to how far you can stretch you pricing before consumer’s “snap”. That happened to me today. I had to run an errand at a local mall and decided to get lunch at the food court while I was there. I chose a very large slice of pizza for $2.99. I then asked them to add on their large drink. The total was almost $7.50! “How much was the drink” I asked. $3.19! I almost fell over. Luckily they had not filled the cup yet and I was able to have them take it off my order. Small water please! If you ask my wife I am one of the least frugal people on earth. But even I have my limits on purchasing a soda.

While at the mall I had a poor customer service experience. Last week I purchased a knee board for my kids to pull behind my Dad’s boat. He ended up buying one that same day so we decided to take ours back. Be bought it at “Sports Authority”. We had not used it and I had all the original tags and the receipt so I thought it would be an easy return. Well the customer service girl was giving me a hard time and finally called her manager on the phone. Here is what she said to her manager on the phone with me standing 2 feet away “He says he never used it but I think he did!”. That was without ever really inspecting the board. If she had she could have seen that the UPS sticker was paper and would never have survived a trip to the lake. I was floored that she would make such a statement right in front of me! The manager came up, did not even look at the board and told her to give me my money back. Anyway, next time I go to Big 5 sporting goods!