Teri Karush Rogers wrote an interesting article in last months’ NY Times entitled “The Psychology of Pricing” in which she writes about the “message that figures carry to buyers”, “break points” and how and when to introduce “price cuts”. These strategies don’t only apply to real estate of course but to many other businesses as well.
But pricing strategies are often overlooked by companies and professionals, choosing instead to live in fear of raising prices, or just keeping them the same because it’s easier. The real estate industry does take them very seriously however, with executives at many NYC real estate companies like Halstead and Bellmarc teaching classes to agents on how to price properties. In part because of the buyers who have unrealistic expectations about what their properties are really worth:
“Despite whispering advice like courtiers into the ear of a monarch, brokers say some sellers have delusions of grandeur, stemming from a failure to grasp that what they want for their home has nothing to do with what it’s worth.
“Most of the time a seller will start to talk about what they want, and I will say, ‘I don’t care — don’t tell me,’ ” said Andrew M. Phillips, a senior vice president of Halstead Property, who teaches classes on pricing to Halstead agents. “I will do my analysis and come back to you with quantitative information.”
Which leads me to wonder: How might a strategy like this impact profitability in your business?
-Susan Martin, NYC Business Coach and pricing strategy fan.
