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Price Discrimination: Charge Some People More

Price Discrimination: Charge Some People More

Price discrimination means you can charge people based on their propensity to pay.

You can’t charge people different amounts just because you don’t like them. You have to offer them something extra. Something rich people care about.

It works because rich people are willing to pay more. You just have to give them the extra little things they need to signal they’re rich or that little bit of comfort they want.

A lot of enterprise software companies use price discrimination, especially with freemium products.

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MORE IDEAS FROM THE SAME ARTICLE

Negotiations are won by whoever cares less. Negotiation is about not wanting it too badly. If you want something too badly, the other person can extract more value from you.

Once you’ve been in a good relationship with somebody for a while whether it’s business or romantic life gets a lot easier because you know that person’s got your back. 

Consumer surplus is the excess value you get from something when you pay less than you were willing to pay.

You’re joining a startup and getting stock options, and the founder says, “This company is going to be worth $1 billion, and I’m giving you 0.1% of the company; therefore, you’re getting $1 million worth of stock.”

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