Veritec Solutions Revolutionizes Self Storage Pricing Practices

Veritec Revolutionizes Self Storage Pricing Practices

Veritec Solutions upends the traditional methods of using "static purchase fences" and restrictions that have enabled a seemingly homogeneous product to be offered to customers at multiple prices.

Dr. Warren Lieberman introduces dynamic differentiated pricing ("value pricing") based on inventory availability, allows customers to self-select the product they want based on their own preferences and values, and discusses how the interplay of psychology fits into customer pricing choices.

The traditional method of revenue management pricing typically involves compartmentalizing product segments, and then assigning prices to those segments. Within a product segment, purchase or usage fences and restrictions are introduced to further compartmentalize the product, allowing for additional price points. But assignments are static.

What if we relax the fencing restrictions? Furthermore, what happens if we dynamically adjust prices based on product availability?

Warren explores these and other ideas in this fascinating presentation as part of the INFORMS Practice Section series on advancing the practice of analytics, operations research, and management science.

A question and answer follows, where value pricing implementation and other topics are discussed.

00:00 The INFORMS Practice Section, Introduction by host Dr. Rajesh Tyagi.
05:45 Presentation Overview.
06:58 The Psychology of Pricing.
11:45 Traditional Revenue Management Perspective.
15:40 Golden State Warriors Ticketing and Airline Seating Examples.
18:30 Reversing the Traditional Revenue Management Perspective.
20:25 Self Storage Overview.
23:44 Dynamic Differentiated Pricing (Value Pricing).
27:14 Website Implications.
34:06 Value Pricing Benefits.
40:48 Value Pricing Sustainability.
43:12 Concluding Thoughts.
46:20 Question and Answer.

Special thanks to INFORMS Section on Practice. INFORMS is the leading international association for professionals in operations research, analytics, management science, economics, behavioral science, statistics, artificial intelligence, data science, applied mathematics, and other relevant fields.

The organization promotes best practices and advances through an array of highly cited publications, conferences, competitions, networking communities, and professional development services.

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