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« Happy new year | Blog Home | Do ads work? »

Change your pricing

When a restaurant goes from a la carte to either a buffet or a prix fixe meal, it is able to find a new class of customers.

Could a law firm charge by the project? When I incorporated Yoyodyne, a fancy firm charged us a fix rate.

Netflix went from charging by the rental to charging by the month.

We use tolls to charge people who drive over bridges more than other folks. We don't hesitate to charge people ordering steak more than people ordering pasta in a restaurant. Could the library charge frequent readers more? What about insurance companies charging more to young families (more likely to have a baby).

Ski areas have a huge fixed cost base (land, grooming, etc.) so they get greedy, sell too many lift tickets and the lines get long. Fixed pricing encourages people to ski a lot, at peak times. What if only cost $3 to get on the mountain, plus a small charge for each lift ride and a premium price for popular lifts at popular times? The technology is already there, the only reason not to try it is momentum.

If you're a copywriter or masseuse or other sort of freelancer, how many retainer clients do you need to relax and spend more time on the work, less on the billing/looking part? What happens when an artist does this?

Why don't airlines experiment with auctioning of seats, baseball card style? You could buy the rights to a seat for $200 (speculating, if you like) and then try to sell it off as the flight time get closer--it's not hard to imagine an easy to use website for these transactions. The seat might change hands a dozen times, earning the airline a processing fee each time, and enriching those that want to start trading this expiring commodity. Sports teams are already trying to figure out how to make this work.

Changing your pricing changes your story.

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Listed below are links to weblogs that reference Change your pricing:

» Going from an Hourly to Fixed Rate: Higher Risk/Higher Reward, and What Seth Godin Said from Being a Starving Graphic Artist Sucks
I jumped on Seth Godin's blog today to see what he's writing about in the New Year and he's got an insightful post on changing pricing structure. Most individual (or small firm) creative freelancers operate under a variable cost model... [Read More]

» Change Your Pricing from Owen Allen - The MOSS Garden
Chris Brogran tweeted about a Seth Godin post about what happens to companies when they change their [Read More]

» options in media buying - is it possible? from marginally subversive
New pricing models for advertising: Could options work in advertising media buying? I think it could - but it would take a little bit more of reading about options (at least for me). But imagine the possibilities! [Read More]

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