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CFO Insights — What’s the right price? The equation isn’t so simple

Published on: Jul 27, 2017

Humans instinctively consider a number of factors when measuring the merits of a purchase and are also highly sensitive to how much their neighbors paid for the same product. Consumers can be fickle, and behavioral science suggests that this is completely natural, if not necessarily rational.

Salespeople also succumb to behavioral biases, which can affect their ability to maintain price points. Two common pitfalls include underestimating how much anchoring can drive customers’ reactions and undercutting themselves – and the organization’s pricing strategy.

By confronting these mistakes head-on, organizations can set up guardrails that account for behavioral biases and faulty execution.

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