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Pricing: An Added Convenience?

August 23, 2010 by Dale Furtwengler — President, Furtwengler & Associates, P.C.

If you haven’t looked at pricing as a way of adding convenience...

...maybe you should.

One of my clients, a horse trainer who specialized in training horses and riders to win hunter/jumper events, offered a full array of services including:

• Training for the horse.
• Lessons for the rider.
• Boarding.
• Show arrangements.
• Show transport.
• Care for the horse during the show.
• Coaching for the rider during the show.

The natural tendency, when you have such a broad array of services, is to price them separately and allow the customer to pick and choose what they want. While this approach allows buyers to tailor the offerings to their needs it has downsides. Buyers spend time:

• Reviewing the invoice to assure its accuracy.
• Wondering whether or not the services were actually provided.
• Trying to recall whether they suspended some services that month.
• Wondering whether some aspect of the service is really worth the money. 

That’s a lot of potential dissatisfaction! If you’re about to dismiss these as minor inconveniences recall your last airline reservation and how much time you spent trying to compare airfares.

From the business owner’s standpoint this approach created a lot of extra paperwork, phone inquiries about the bill and the need to, periodically, resell the customer on some of the services they questioned.

It’s counter-intuitive, but ala carte pricing often detracts from the customer experience rather than enhancing it.  If you’re looking for a way to avoid the pitfalls do as my client and I did:

• Identify which combinations of purchases your customers make most often and with what frequency.
• Bundle them into packages that allow you to charge one price for the bundle.  

That way, when your customer gets the invoice, a quick glance is all that’s needed to assure that it’s correct.  As you can see, your pricing strategy can add a great deal of convenience to your customers and save you a lot of work in the process.

About Dale Furtwengler

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