The Profit Hypothesis: Uncover Willingness-To-Pay Innovate Strategy and Grow Profits by Jake Lee
Consumers will mislead you. Not on purpose though, which makes it worse.
The consumer perspective is an essential part of optimizing your business strategy. Marketers can make better business decisions if they can predict in advance what consumers will do. However, these two question types inadvertently trigger an unwanted procedure in the mind of the consumer that is at best unreliable. Despite being well intentioned, consumers are not aware of the trap that is awaiting you inside of their brain.
A well-crafted experiment allows the decision maker to side-step the psychological trap and test a wide range of hypotheses. The experiment also allows you to quantify predicted consumer behavior in the most important metric – profit.
This book will walk you through the stages of an experiment while focusing on the role of consumers play on firm profit. You’ll get an introduction to the foundations needed without all the complex math.
Whether you’ve been experimenting with consumer choices for decades or are just getting started, this book has something for anyone interested in crafting a better strategy based on a deep understanding of consumers.
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Jake holds degrees in both Business and Statistics. He was first introduced to choice experiments in an MBA marketing course. He found it so fascinating that he snuck into a much more technical Ph.D. level course on the same topic the next semester.
Prior to graduation, the same professor, who allowed him to participate in the advanced course, introduced him to a friend and helped him get a job at The Modellers. There he got hands-on experience working on experiments with some of the leading experts in consumer choice. While working there, his infatuation with helping businesses make better decisions turned into an obsession.
Since that early post graduate experience, Jake has gone on to present several new-to-the-world discoveries at various conferences including the American Marketing Association’s Advanced Research Technique Forum and the Sawtooth Software conference.
Today he leads Red Analytics, an analytics firm with a strong emphasis on consumer choice. The company works on projects that run the gamut from standard applications to large problems requiring extra computing power to rare problems that require a new approach or updates to the standard approach to avoid pitfalls for clients.
Jake has pioneered the development of best-in-class market simulators. The Red Analytics’ simulators are custom built for each client, able to harness the power of cloud computing, and provide an added layer of firewall security for sensitive data. The custom-built applications can address specific client needs like Willingness-to-Pay and a wide range of different cost calculations.