Yeah, I'm sorta on a pricing/value kick this week.
Even more important than setting the right prices is convincing customers that those prices represent a fair ratio of price to value for what they're getting.
I was listening to a radio show on my way to work the other day — which means I got to listen to about six minutes of the show — and they were discussing value and American consumerism. It seemed like a very interesting show but my commute isn't very long, so I only got a little of it before my brain was left to wander off on its own.
Thing is, we love a deal. We all want a great value at an amazing bargain. That is, "we" as consumers, which includes you and me. Which means that when you and I take ourselves out of the "we as consumers" equation, stand back, and look at "them, as consumers" from the "we, as businesses" perspective, it's in our best interest to draw from our own experiences and perceptions of the value-to-price issue as consumers.
Don't worry, that paragraph even confuses me a little.
Point is, I've been toying with notions of a major business revamp lately. I'll be totally redecorating the salon in another month or so (gotta find time,) and what better time to unveil a whole new pricing structure than in conjunction with a grand re-opening?
Except — as I mentioned previously — I'm pretty OK with my prices right now. Part of me just wants to play with that whole price-to-value thing. Which is when I had this great idea: What if I just jack up the prices and then offer ridiculous discount and promotions all the time?
Everyone I know loves shopping at Kohl's. I'll be like them. Naturally, I'll offer my current regular clients some sort of "loyalty" card that will hold their prices at what they are paying currently. Then I'll blanket the Internets with coupons — 20% off one service, $15 off a full set, buy-one/get-one-half-off deals ... then I'll get my own app and people can get daily deals; book today and get XYZ deal of the day.
No one will ever pay full price. But everyone will feel like they’re getting an extraordinary deal because they aren't paying full price.
I wonder how this pricing structure would work? It's obviously working just fine for Kohl's.