Can Pricing Strategy Affect Your Brand
Can Pricing Strategy Affect Your Brand
* $25.00 fee to check a second bag (regardless of weight).
* $15.00-$20.00 fee to select your seat in advance.
* $25.00 fee to book your flight by phone instead of online.
The problem with this type of pricing strategy is the effect it has on your ability to build brand equity. In the article, Joseph D'Cruz, a professor of strategic management at the University of Toronto, questions Air Canada's strategy. "They're trying to squeeze every last cent of revenue out of the customer. Are they sacrificing customer goodwill by nickel-and-diming the passenger...my sense is that they are probably doing so."
Think Like a Consumer.
A good practice to embrace during the development/review of pricing strategies is to think and feel like a consumer. A client of mine recently used "price empathy" during a review to determine whether or not to implement a minimum fee for a "pay as you go" service. The group put themselves in their customers shoes and realized they were better off removing the minimum fee - The decision was based on how each employee would feel if they were presented with their own pricing policy. The decision has proven to be a good one - the service has taken off due to no minimum payments.
"Price Does Not Include Batteries".
We're all familiar with the disclaimer "price does not include..." Not including certain features, services, options, etc. make sense with some types of products. However, I would urge your small business to be cautious with respect to "a la carte" pricing. If consumers have an expectation that your product or service should include something, then charging for it on top of the base price will likely cause friction. For example, it would be logical for consumers to assume the price of an airline ticket would include the ability to book flights by phone or reserve seats in advance.
I wonder if executives at Air Canada thought about how customers might feel when they get charged for "basic" services on top of the original price of their ticket. An apparent lack of price empathy will not help your brand - it can only strain relationships with your customers and serve to erode any goodwill or equity your company has developed.
Offer Good Value.
Many businesses succumb to the pressure of trying to compete on price and then attempt to regain margin by adding fees. Would it not be better to charge a slightly higher price and include a few extra features/services? Give some thought to the effects of pricing policies on your brand. Offering good value will help your small business build a positive image, develop goodwill with your customers and, over time, build brand equity.
Can Pricing Strategy Affect Your Brand - To learn more about this author, visit Mark Smiciklas's Website.
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Can your pricing strategy affect how your clients perceive your small business brand? I read an article yesterday about soaring fuel costs in the travel sector and how Canada's much maligned national airline (Air Canada) will be implementing a series of fees to recoup costs. Here are a couple of my favorites:
* $25.00 fee to check a second bag (regardless of weight).
* $15.00-$20.00 fee to select your seat in advance.
* $25.00 fee to book your flight by phone instead of online.
The problem with this type of pricing strategy is the effect it has on your ability to build brand equity. In the article, Joseph D'Cruz, a professor of strategic management at the University of Toronto, questions Air Canada's strategy. "They're trying to squeeze every last cent of revenue out of the customer. Are they sacrificing customer goodwill by nickel-and-diming the passenger...my sense is that they are probably doing so."
Think Like a Consumer.
A good practice to embrace during the development/review of pricing strategies is to think and feel like a consumer. A client of mine recently used "price empathy" during a review to determine whether or not to implement a minimum fee for a "pay as you go" service. The group put themselves in their customers shoes and realized they were better off removing the minimum fee - The decision was based on how each employee would feel if they were presented with their own pricing policy. The decision has proven to be a good one - the service has taken off due to no minimum payments.
"Price Does Not Include Batteries".
We're all familiar with the disclaimer "price does not include..." Not including certain features, services, options, etc. make sense with some types of products. However, I would urge your small business to be cautious with respect to "a la carte" pricing. If consumers have an expectation that your product or service should include something, then charging for it on top of the base price will likely cause friction. For example, it would be logical for consumers to assume the price of an airline ticket would include the ability to book flights by phone or reserve seats in advance.
I wonder if executives at Air Canada thought about how customers might feel when they get charged for "basic" services on top of the original price of their ticket. An apparent lack of price empathy will not help your brand - it can only strain relationships with your customers and serve to erode any goodwill or equity your company has developed.
Offer Good Value.
Many businesses succumb to the pressure of trying to compete on price and then attempt to regain margin by adding fees. Would it not be better to charge a slightly higher price and include a few extra features/services? Give some thought to the effects of pricing policies on your brand. Offering good value will help your small business build a positive image, develop goodwill with your customers and, over time, build brand equity.
Can Pricing Strategy Affect Your Brand - To learn more about this author, visit Mark Smiciklas's Website.
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 Can Pricing Strategy Affect Your Brand
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| Can your pricing strategy affect how your clients perceive your small business brand? I read an article yesterday about soaring fuel costs in the travel sector and how Canada's much maligned national airline (Air Ca... |
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Dr. John OdaJohn Oda Ph.D NLP is a business peak performance expert, an author, and speaker frequently called upon to provide corporate training, workshops and seminars for many companies in the United States. He is an expert in coaching sales and business professionals in overcoming the behaviors and obstacles that may impede their sales results and affect their bottom line. Since 1995, John has created a speaking bureau such topics, which include: time management, sales training, human diversity, leadership programs and etc. He provides companies with a strategic plan to increase their bottom line by over 25 percent yearly. - Visit Dr. John Oda's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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Michel NerayMichel Neray has over 25 years of experience as an award-winning copywriter, an Internet pioneer, a tradeshow pitchman and a senior sales and marketing executive. An online pioneer, he was one of the first marketing professionals to embrace the Internet by building websites as early as 1993. In 1994, Michel co-authored a book entitled "The Great Crossover: Personal Confidence in the Age of the Microchip", which made it to Jack Canfield's Achiever's Recommended Reading List. Michel founded Portfolios.com in 1995, the world's first online source directory for creative professionals and one of the first websites based on community generated content. Since creating The Essential Message in 2003, Michel has helped thousands of independent professionals and entrepreneurs as well as growing corporations find a better way to differentiate, position and brand themselves. In 2005, his chapter "Everything Starts With A Conversation" was selected as the lead for the book, "Sales Gurus Speak Out" and re-published in 2008 for 'Awakening The Workplace Volume 3'. He is also a co-author of "In the Company of Leaders" (2008) with 40 top North American leadership experts. - Visit Michel Neray's Website |
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George LudwigGeorge Ludwig is a recognized authority on sales strategy and peak performance psychology. An international speaker, trainer, and corporate consultant, he helps clients like Johnson & Johnson, Abbott Laboratories, Northwestern Mutual, CIGNA, and numerous others improve sales force effectiveness and performance. Though it's George's strategies and processes that help corporations increase productivity and performance, it's his tremendous energy and dynamism that spark the transformation. Again and again, clients remark on his amazing ability to unleash human capacity and inspire men and women to break out of their comfort zones. The result is a whole new type of salesperson. His customized presentations teach achievers to make stunning advances in their lives. From helping salespeople realize cherished dreams to helping corporations exponentially accelerate revenue streams, George Ludwig leaves audiences and individuals empowered, emboldened, and clamoring for more. George is the best-selling author of Power Selling: Seven Strategies for Cracking the Sales Code and Wise Moves: 60 Quick Tips to Improve Your Position in Life & Business. - Visit George Ludwig's Website |
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 Mark Smiciklas (Visit Mark's Website) Mark Smiciklas is a Vancouver Marketing Consultant. His firm, Intersection Consulting, helps small to mid-sized businesses address challenges in the areas of marketing, management and business development. To find out more about Intersection Consulting, please visit www.intersectionconsulting.com/. If you are interested in more thoughts and ideas on marketing and management for small business please visit the Intersection Blog at www.intersectionconsulting.com/b log/ Download Mark's FREE E-BOOK, "The Small Picture - A Visual Guide To Marketing & Management Ideas for Small Business", at www.intersectionconsulting. com/ebook.php.
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