Definition:
Willingness to pay (WTP) is the maximum price a customer is prepared to pay for a product.
DynamicPricing.ai leverages behavioral and historical data to estimate WTP and optimize prices accordingly.
Why It Matters:
- Maximizes revenue
- Prevents underpricing
- Improves customer segmentation
Example:
A retailer selling premium kitchen appliances observes that customers continue purchasing a blender even after the price increases from $179 to $199. This suggests that the customers’ willingness to pay is higher than previously estimated.