PRICED AT A PREMIUM

Kirstie Allsopp – she of “Phil”, house-buying common sense and all things knitted – has been Tweeting of late on the supply and demand pricing policy of airlines. Ms Allsopp is, I’m guessing, investigating for a television programme the practice of airlines and their IT systems pricing seats inline with sales patterns.

Quite what the always good-value Kirstie knows about the issue I’m not entirely sure. But hey, when did having in-depth expertise ever get in the way of today’s commissioning editors. She does, however, highlight what could become a growing trend in terms of pricing policy and in businesses reacting more aggressively than ever to consumer behaviour.

In New York it is a sales tactic now adopted on Broadway. Walk into a theatre box office and you will see a screen on which the next week’s performances are listed and displayed in such a way they can be easily adjusted in response to consumer demand.

So, for instance, if you want to see “The Book of Mormon” – the biggest Broadway money-spinner in years and due here in 2013 (highly recommended, by the way) – on a Saturday evening or over a holiday weekend you could be looking at a ticket price tag of a whopping US$477!

I also noted producers of some Broadway productions are charging premiums for aisle seats.

What next? Food priced according to freshness? Fashion retailers charging more if you leave buying beach wear to the last minute? A pound to use the toilet on a plane? Oh, yes, one obnoxious Irish businessman is already mulling that one over isn’t he?

Now, depending on your point of view this is either good commercial practice or a blatant rip-off. In these difficult economic times it makes perfectly good sense for businesses to entice customers to commit early and get revenue in the bank.

Go back just a few years and it was accepted you could pencil holiday dates in advance and nearer the time make the purchase – sometimes having to compromise, occasionally bagging an amazing deal but hardly ever being totally disappointed.

And while there are still late availability offers, if you are at all restricted to dates or have a particular preference in terms of destination or accommodation, you could well end up struggling to find anything acceptable or within budget.

But what does all this mean for marketers and also for consumers?

As customers we will have to be more forward-thinking – difficult when we are all cautious about spending and often prefer to “wait and see”, especially when it comes to discretionary spend items.

For businesses? Well, pricing has, of course, always been an integral part of any marketing strategy. But to devise and implement it well requires both a forensic like insight into your sector and an on-going and dedicated investment into understanding your customers/clients, how they spend and the numerous factors that can influence their decisions.

One thing all this does make crystal clear is that, whether marketer, sales director, CEO or consumer, we will all have to be smarter than ever before in our behaviour and in the way we plan, sell and purchase.

David Leck – Guest Blogger