As both Yummy and Anne have touched on, women always say that the demographic of clientele does change at various pricing strata. There is overlap of course but in general it does not appear to be the same pool of clients shopping at the $150 price point as it is at the $400 price point. The things they are looking for and value (outside of great sex which is a given requirement) may be different. Any perusing through the various Hookernomics threads on this board will clearly show these differences to be present.
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Originally Posted by animitasenthe
Is it really safe to assume that lower consideration means higher volume and vice versa? I mean really how many hobbyists can one lady entertain in a day? What's the competitive advantage of going over a $$$, and are there and ladies brave enough to divulge if they would go through the same amount at any rate level?
I've seen both sides, just seeking perspectives.
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Of course not, that's making some very huge assumptions.
It's safe to assume that, ceteris paribus (holding everything else constant), lower prices will result in more quantity demanded for a lady's services. The Law of Demand holds true for all businesses regardless of the good or service being sold.
Whether or not a lady actually IS higher volume even with demand for it depends on other variables such as her desired number of clients per day/week/month as well as her ability/desire to keep quality constant... All sole proprietor business owner/operators in service industries face the same fundamental problem, relatively severe Supply Constraints. There is a point at which the demand cannot be met at all or cannot be met without a sacrifice in quality. A provider may have enough excess demand that raising prices does not in fact cause demand to drop below her supply constraints, thus having essentially zero negative impact on her business while increasing profit/session. Even if it does decrease her demand below her comfortable maximum output, the corresponding increase in profit may be such that it results in a net gain regardless and leaves time for other things. Every business owner's goal right?
The question "how many hobbyists can one lady entertain in a day" is too simplistic as it ignores quality of service and length of appointment. The answer is still variable depending on the lady.
Regardless, there IS a maximum capacity number and it is essentially a hard limit as a sole proprietorship owner/operator service business of one employee has limited scalability. Every provider is different as to the maximum number of hours worth of sessions she feels comfortable having per day/week/month
This hard limit means that one has no idea whether that $400 provider is operating at her maximum capacity just like the $150 provider and hers. Ceteris paribus, their maximum capacity, i.e. supply constraints, will be the same. With enough demand they could both be operating at capacity and, if they are good at their job, you'd never be the wiser.
A lady may CHOOSE to operate at lower than absolute maximum capacity even if she has demand for it. Reasons for that are legion but may have to do with quality of life, work/life balance, valuing longer term sustainability over short term gain, burnout prevention, alternate income streams, etc...
Your second question involves competitive advantage. Obviously the more a business can charge for it's services and still retain enough demand to operate at its desired output the better it will be compared to other businesses. Competitive advantages take two main forms, cost advantage and differentiation advantage. Since we're talking about providers who charge MORE for services they obviously have no cost advantage.
But, what sets providers apart from each other is differentiation advantage via looks, menu, quality of service and experience they provide, marketing prowess, target client demographic, attitude, review history, etc. Girls with a differentiation advantage will almost certainly have an easier time sustaining demand at higher price points. These same girls will also have more freedom to choose their particular comfortable level of output while still achieving their financial goals.
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Originally Posted by animitasenthe
I guess there is a Cost:Gross Income ratio also.
I saw a $$$50 once, and I was so let down I went straight to a $80 and had much better time. It's gamble either way IMO, why take the chance. Of course research helps.
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You can't calculate gross income without a measure of quantity sold. One would have to make assumptions about quantity demanded based on cost. As shown above, this ignores supply constraints which may nullify much of this mechanism. Obviously if there were two providers each operating at their maximum capacity then the one charging higher rates would have a higher Gross Income. Holding quantity sold constant, the corresponding cost:gross profit ratio would obviously be higher though I'm not sure how this is useful.
The second part of your comment is rather silly as it is an anecdotal sample size of one. I've had great sessions at <$150 and also terrible sessions. The same can be said of my sessions costing >$300. I'm not sure what this proves nor the relationship to the other things being discussed here.
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Originally Posted by animitasenthe
I'm curious about the complex statistics on it. What the proportion of the population that decreases for every incremental 50 increase? what is the average decrease in volume for every incremental increase in 50? And then there's the whole marketing research aspect too. What's the relationship to higher cost to hobbiest satisfaction? Nah nevermind, I'm more curious about BCD skills.
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Ignoring the fact that you're once again making assumptions about volume decreasing by necessity rather than choice, now what you're talking about is Price Elasticity of Demand, i.e. the responsiveness of the quantity demanded for a good/service to changes in its price. You can't look at it in terms of values though like $50 you have to look at it it terms of percentage change. If you really wanted to calculate it you'd need the data set and then one method would be to take any two points and calculate the absolute value of the delta in quantity demanded divided by the absolute value of the delta in price. A number higher than 1 means that for each 1% percent change in price there is a greater than 1% opposing change in quantity demanded.
We don't need data to use some basic knowledge of economics and say that luxury goods and services (things which are not necessities) tend to have high elasticity of demand. My guess is that the data would show this to be true regarding Provider pricing, i.e. the responsiveness of quantity demanded to price is likely high.
The relationship between higher cost and hobbyist satisfaction is interesting but ultimately highly variable depending on the product/service right? Things which cost more do tend to have a higher perceived value and so do services which are nicely packaged with good advertising. You can take the same product or service, package it differently and present it in a more professional way and you'll be able to charge more for it and have satisfaction remain equal. Then again, what is the total utility of two $200 sessions vs one $400 session? How would we quantify it? At what point does the Law of Diminishing Marginal Utility begin to affect sessions with providers? But again, you didn't mention those things at all, your question is merely about cost and thus is too overly simplistic for a real answer.
Cost:Volume ratio
. She is the best choice in h-town by far.
