Pricing the Customer - Reed Iredale

Pricing the Customer

Written by Reed

If I have 2000 seats to fill and 400 prices I know I’m missing 1600 prices.

Ex-CEO of American Airlines

Having modern pricing let’s you price the customer and not the service. So if you have multiple levers of value behind your service you sell, there can be a number of different ways to allocate a price to the customer.

Now this is definitely price discrimination, though we have ultimately had the prerogative of calling discrimination a negative.

However economists have found that price discrimination is a net economic good for the world. How else would we get drugs to 3rd world countries at 1/10 the price? By offering up a lower price tier for a user that needs them in that specific country.

You have services to sell, and you want to be profitable. But don’t you want raving fans? And price premiums that can stand up to having a good brand?

Pricing the customer controls how a customer values your service. So having one price means you set a price for an average in the segment, which means you haven’t priced anyone specifically.

Pricing the customer is more ethical, a better customer experience and will drive higher profitability for your business. I guarantee this.