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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Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
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Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith'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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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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