Much easier than doing so in the real world where most stores have a physical sign with a fixed price. On the Web, you can charge more from those customers who will pay more and less from those customers who would only buy at a lower price. With this information, profits can be maximized by multiplying the profit margins and their corresponding conversion rates and picking the price that comes out best. Even though standard economic theory says that you should employ both of these strategies, I warn against them due to their impact on user loyalty. It will quickly become known that different people are charged different rates and those customers who have been charged the higher price will rebel and refuse to return.
Customers can be quite upset when they discover that they paid more than others.
Differential pricing is certainly used in the old economy, with the most well-known example being airline tickets. And yet that's the exact strategy followed by some Web pricing schemes. The classic example used in most presentations about differential pricing is to monitor a user as he or she is moving through a site. If they just keep looking instead of putting something into the shopping cart, then the user is considered unlikely to buy at the current prices and is offered a discount. This strategy probably works, but only until it becomes common knowledge.