At two recent Beyond Cost Plus sessions, those in Grand Rapids MI and Bangor ME, some of the florists in attendance had a very particular problem. They had a year round local customer base that was very price sensitive, and a seasonal population of "summer people" that were prepared to spend much more.
It is very tricky. They need to offer prices that year round residents can afford, but offering those same prices to the summer people means leaving money on the table and also undermining their confidence in the product - people with money often assume that low prices mean low quality. Fortunately price discrimination does offer a solution.
Another post looks at a real world example from the hotel business – a hurdle effectively employed to make sure that they don't discount unless they absolutely have to. When it's late and you're tired it's tempting to just pay the higher walk-up rate even though taking just a minute to reserve online from the hotel lobby can save you a considerable amount of money.
Anchoring also gets some attention. It is generally a very effective technique, one used to make a price seem like a relative bargain, but it can also backfire. In this example a heavily discounted introductory price might leave you thinking that is the real price, and unwilling to pay the higher "standard" price.
New content in the consumer section also looks at anchoring, but from a consumer perspective. Most of us are susceptible to anchoring, and understanding it is a good way to avoid falling in love with the savings on items we don't even really want.
Another post in the consumer section looks at bundling. Bundling is very good at getting us to buy stuff we don't really want, and more of what we do want than we intended. Understanding why bundling is so effective can help us, as consumers, resist the temptation.
Beyond Cost Plus is sponsored by FloristWare – powerful, affordable and easy-to-use software for florists that will help save time and money while increasing sales and profits.