Pricing strategy

Mather Economics helps our clients grow their revenue without losing customers. We utilize sophisticated economic modeling tools as well as business experience to provide actionable recommendations.

Marginal cost measurement

Determining how costs change with the level of output is critical to determining the profit-maximizing price point. We can measure marginal costs through econometric models or activity-based costing methods. Our work with marginal cost measurement includes clients in the transportation, energy & utilities, telecommunications, and newspaper industries.

Price elasticity measurement

Which customers are willing to pay more for your products or services? Having this insight enables companies to match prices to customers, and it results in greater profit and higher customer satisfaction & retention.

Circulation pricing strategy & implementation

For newspapers and other publications, the opportunity to match pricing & retention strategies to individual customers is a opportunity enjoyed by few industries. Make the most of this capability through our Market Based Pricing process that has generated millions in additional circulation revenue for our clients.

Customer acquisition pricing strategy

What is the correct acquisition offer? Balancing sales quantity and quality is a critical component of successful customer acquisition. We can help determine what offers are the most profitable for your company through analysis of past sales data and customer retention.

Subscription renewal pricing strategy

Once customers have been acquired, they must make the decision to renew repeatedly over the life of their subscription. Renewal pricing often represents over 80% of the pricing decisions made by a company, and analysis of which customers are able and willing to pay more for your products can yield significant returns.

Advertising pricing strategy

How to rationalize and optimize advertising rates? What is the balance between volume commitments and price? These questions are fundamental to optimizing your advertising strategy, and we can help support strategic advertising pricing decisions through customer analysis.

Customer segmentation

All customers are not the same. Clustering your customers by price sensitivity, churn risk, feature preferences, among other possibilities, can enable effective promotions and profitable pricing strategies.

Market measurement

Mather Economics can help you estimate the market potential for a new product or service. We do this through direct research to obtain proprietary data and/or through the use of publicly available data. Market measurement is often applied in valuation or business model development.

Economic Modeling

Determining the supply and demand for goods and services can help companies understand the likely market price or likely competitive response they will face following strategic decisions.

Financial Modeling

Mather Economics has significant experience building robust financial models for estimating discounted cash flows, revenue potential, and company profitability. We can assist you with building a model you can support once the engagement is complete.


Mather Economics can provide forecasts for your company using time series, panel data econometrics, or other forms of statistical analysis of past data. We can develop forecasts using STATA or SAS statistical applications.

Customer Retention Modeling

Mather Economics uses data from prior customer behavior to model customer retention. We utilize survival modeling, logit/probit models, and other econometric models to isolate the factors that affect customer retention. Once we understand the determinants of customer churn & retention, we can apply those insights to help you increase retention profitably.

Econometric modeling

The field of econometrics has become a powerful tool that has many applications to business. The prevalence of data within companies, relatively inexpensive computing power, and powerful statistical software have enabled the use of econometrics in business settings where it was not formerly feasible. Econometrics uses regression analysis and other statistical tools to measure the effect independent variables have on the dependent variable. For instance, econometric models can measure the effect of price increases have on a customer’s likelihood of renewing their subscription.

Marketing spend effectiveness (MSE) & Return on marketing investment (ROMI)

Mather Economics uses econometric models to measure how impressions by different media sources translate into additional sales. Using econometric models, we can isolate the effects of marketing on sales controlling for other factors such as seasonality, pricing changes, competitive actions, and product changes. Once we have measured the incremental sales by media channel, we can apply this knowledge to optimize spend and calculate the return on market investment (ROMI).

Customer lifetime value (CLV)

Mather Economics uses historical customer data to model retention in econometric studies using survival analysis to measure the effect of customer characteristics, events, product mix, and other factors. Using the output of these models we can predict the probability a customer will remain active in future periods. We weight future operating margins for each customer by the probability the customer will be active.

Price rule management (PRM)

Establishing pricing business rules is an effective way to operationalize pricing analytics. These rules can be defined so that a firm’s pricing decisions are consistent with the overall strategy of the firm. Often, in the day-to-day business activities the big picture can get lost, and pricing rules can enforce the overall direction is maintained. Price rule management can be used to set complex rules that enforce minimum margin requirements within a dynamic pricing environment with multiple features & options available.

Predictive Modeling

An application of our econometric models, we utilize predictive modeling to apply analytics in strategic decisions. Mather Economics will employ predictive models to identify the optimal price point or retention strategy. Predictive models enable us to forecast results under alternative strategies.

Data mining

A broad field of analytics that focuses on finding patterns within disparate data fields. The practical application of data mining is growing as the prevalence of data within firms increases. Mather Economics can employ data mining techniques in our projects in addition to our econometric tools. Establishing causality, or the link between two variables that appear to behave in a related fashion, is important if future actions are to be based on the insights.