Pricing...You are a Television Star Baby!
In a marketplace where Internet booksellers focus on offering the lowest price, 800CEOREAD has differentiated itself by becoming an information portal focused on offering an unmatchable customer experience for business book readers. I am pleased to note that their Big Brain Business Club (editors select and ship what they view to be the best new business books to club members) recently chose The 1% Windfall as their official selection. Thank you Big Brain Business Club!
Now on to the blog…
One of the most interesting concepts in pricing is the notion of rolling out a new pricing plan to attract new customers (I call this Pick-a-Plan). Does this really happen, you may be wondering. Two major companies, the United States Post Office (USPS) and Progressive Insurance, are currently featuring their new pricing plans in national television campaigns.
The USPS has an innovative pricing plan for its priority mail service (delivery within the U.S. is usually within 2 – 3 days). As most other delivery services do, the USPS generally charges for priority mail by the package weight as well as the destination distance. Thus, shipping a package involves weighing it as well as figuring out the correct charge based on distance. A bit cumbersome, don’t you think? To serve customers who prefer a different - more simple - pricing plan, the USPS also offers prepaid envelopes/boxes. Simply pay one price, then stuff as much as you want into the envelope (or box) and send it anywhere in the U.S.. What could be more convenient?
Progressive Insurance is blasting a “Name Your Price” campaign. Instead of building a car insurance estimate by listing the services that you want and then getting hit with the price, Progressive is switching the process around. Now, you first name your price and then Progressive includes different insurance components (deductibles, etc) that meet your budget. What a great idea – people are price conscious and this process meets their pricing needs.
I’ve said it before and I’ll say it again: as these examples illustrate, a simple pricing plan can be disruptive by activating new customers and providing a competitive advantage over rivals.
Thanks for reading and have a great Fourth of July.
