The Sorcerer’s Apprentice and the $23 Million Book

I’m a big fan of automating pricing tasks. ¬†Companies spend way too much time on mundane issues like moving pricing information from one system (or spreadsheet) to another, and far too little time really thinking strategically about price and value. … Read More

What good is a price if you can’t invoice it?

About a decade ago, at the height of the dot-com boom, I was doing some work for a tech industry heavyweight that sold some of the most sophisticated technology on the planet. Unfortunately, despite their technological prowess, they had trouble … Read More

The reverse volume discount

Generally, per-unit prices go down as volumes go up. This is not always the case, however. Occasionally, whether by accident or as a tax on the mathematically disinclined, you’ll see something like this:(From The Consumerist, which includes another, even more … Read More

Fixing Mistakes in Your Pricing Structure: 2 Examples

You analyze reams of data. You carefully evaluate potential pricing policies. You select what you think is the best one. And then your users tell you that they hate it. And not just because no one likes to spend money … Read More

The Math of Multiple Discounts

Recent research by Akshay Rao and Haipeng Chen confirms that people have a hard time processing a sequence of percentage discounts. For example, if you have a $100 item at 20% off, and then take another 20% off, what is … Read More

Giving away the Store

From time to time, an item hits the news about a company selling something at an absurd price. In the age of online shopping, these mistakes can quickly spiral out of control. When you sell high-octane gas at $0.27 per … Read More

Hacker Quadruples Car Wash Price

With motives unknown, a hacker apparently managed to change the price of a car wash at a Salt Lake City gas station from $2 to $8. The owners are offerring to reimburse the dozen or so customers who paid the … Read More

Pricing Error: Bill Off by about $200 Trillion

Yes, that’s “t” as in “trillion.” A Malaysian man received a phone bill for $218T (or 806,400,000,000,000.01 Malaysian ringgit) after disconnecting his deceased father’s phone line. If your calls cost $1 per minute (perhaps some kind of international dialing), you’d … Read More

Tokyo Hotel for $2 per Night

Not so fast, says online travel site Expedia after a pricing glitch gave some travelers extremely cheap rooms in some of the most expensive cities in the world. Apparently, a “technical error” in Hilton’s computer systems caused incorrect prices for … Read More

Medicare Guide Has Pricing Error

A guide to changes in Medicare that the government is mailing to 42 million homes contains an important pricing error, the Chicago Tribune reported yesterday. The guide mistakenly suggests that people have access to a number of programs at no … Read More