Why is price sensitivity important?

Asked 2 years ago

When I read up about pricing my products, I read that I must take pricing sensitivity into consideration. What does this mean, and why is it so important?

Price skimming Pricing strategy Pricing policies Price sensitivity

Michael Hammond

Monday, March 21, 2022

Analyzing and keeping track of your price sensitivity is of pivotal importance. You can gauge the impact of a price change on your revenues and your customer's behavior.
Price sensitivity also assists you in analyzing the best situation to change prices and fully reap its benefits. Furthermore, knowing the product's price sensitivity helps you understand the product's value and the customer's willingness to pay.

Sushil Sharma

Tuesday, May 10, 2022

By definition, it means how the demand of a product/service changes based on change in its price. It helps you find out the value your product is creating by gauging customers willingness to pay when the price changes (low/high).  By studying your customers behavior, you can decide how to implement price changes.