How Price Elasticity Affects Consumer Behavior with Anshu Jalora

Anshu Jalora is the Founder and Managing director of Sciative Solutions Private Ltd., used to be a Director of Pricing Strategy at Starbucks, Pricing Scientist at PROS, and Director of Pricing at Overstock.  In this episode, Anshu talks about how true price elasticity brings about change in customers behavior and creates great impact in business. He shares about what his company, Sciative does at optimizing pricing, simplifying solutions from massive data to generate insights in lightning-fast speed necessary for decision making needed to make a maximum impact to the business.    Why you have to check out today’s podcast:  Find out what Sciativedo to help businesses maximize value in the massive data available to them  Find out the two crucial things that make a huge impact in a customer's traffic pattern Learn how to achieve bringing in customers from low-end products to high-end products with the understanding of price elasticity and consumer behavior   “Focus on three V’s - Value, Variety, and Velocity. As you're looking at your pricing processes, focus on these three V's.”  - Anshu Jalora    Topics Covered:  02:17 - An interesting story related to his Ph.D. story  03:30 - How he got into Pricing  04:07 - What made him like Pricing  06:09 - Success stories in B2C in terms of applying scientific models for pricing  08:52 - Capturing value through individual customer level or collection of customers together  09:32 - Talking about the coined word Sciative  10:39 - How can Sciative help businesses truly find value in the massive data that they have  13:36 - Price elasticity and consumer behavior  15:26 - Two things that basically make a huge impact on a customer's traffic pattern  21:20 - His thoughts on the criticism against price elasticity  23:55 - Playing with different types of mathematical models in coming up with true price elasticity  24:58 - What are Walmart parking lot products  28:26 - A pricing advice he shares that would have a great impact to one’s business    Key Takeaways:  “Pricing is a very powerful tool. It's educational for customers. Sometimes we guide customer behavior, we help customers figure out what is right for them. We make a direct impact on the business.” - Anshu Jalora  “What we found used to work best was that you don't have to take a blanket pricing approach everywhere, there will be some products where you will have more opportunities of increasing pricing without affecting customer sentiments and in some others you will not increase customer prices. You may even decrease prices to make the entire portfolio look competitive enough.”  - Anshu Jalora  “I fundamentally believe that if you change prices, customer behavior will change and that is elasticity for me.”  - Anshu Jalora  “Some very misleading information also get picked up by simplistic models, if we do not get into the nitty gritties and details and separate out seasonality effects, separate out cannibalization effects, cross price elasticity effect, we won't be able to compute the true price elasticity. And this is where elasticity gets criticized a lot. And that's what we try to avoid when you're educating customers.”  - Anshu Jalora    People / Resources Mentioned:  Andy Boyd: https://www.linkedin.com/in/andy-boyd-9760945/   Connect with Anshu Jalora: LinkedIn: https://www.linkedin.com/in/anshujalora Website: https://www.sciative.com/   Connect with Mark Stiving:  Email: [email protected]    LinkedIn: https://www.linkedin.com/in/stiving/