Remember playing Marco Polo when you were a kid? In this swimming pool game, the person who is "it" closes his or her eyes while otherplayers (eyes open) spread out around the pool. The goal of the "it" player is to tag another player by yelling "Marco" and locating the other players by sound when they respond "Polo." Winning thisgame requires listening and responding.
The same is true for setting prices: companies need to listen and respond to consumers. One price does not fit all — creating a successful pricing strategy ismuch like playing Marco Polo. Companies need to listen for clues from potential customers ("Marco") and respond with the right plans/prices ("Polo").
In terms of their pricing needs, customers forany product or service tend to differ in three primary ways: (1) desired pricing plans (for instance, instead of outright ownership, a preference to lease), (2) product needs, and (3) willingness topay. The following strategies can generate new profits and growth by understanding and meeting these needs.
Pick-a-Plan. Customers are often interested in a product but the pricing plan simply does notwork for them. Offering a new pricing strategy can "activate" these dormant customers by meeting their pricing needs. A friend recently decided to take his entire family to the Caribbean to celebratehis 70th birthday. Inquiring about his destination, he emphasized: "I have to go to an all-inclusive resort — it would kill me to see my grandchildren drinking $5 Coca-Colas all day" ("Marco"). Byoffering an all-inclusive plan ("Polo"), resorts satisfy an important need of consumers who are willing to pay a premium for the freedom of not having to think about the price of every meal, drink, oractivity while on vacation. Offering this pricing plan moves a resort to the top of the list for a key segment of vacationers.
Implementing a new pick-a-plan pricing strategy can create "home run"...