"How much did you pay for that seat?" – Airline Tickets and Other Mysteries of Pricing

Mark Bergen, James D. Watkins Chair in Marketing

On a recent flight from Minneapolis to New York, I asked the person next to me how much they paid for their ticket. After a long pause, I felt it necessary to explain why I was asking. Her hesitation was born out of the fact that it was a loaded question. She of course could just tell me the truth, but there was some level of apprehension because we all know that each of us has likely paid a different price, even though we were all going from Minneapolis to New York.

The real question is: Why? Airlines, more than most other industries, have been very effective at being able to understand individual level value. That means they knew that I was going to a conference, not paying out of pocket, needed some flexibility in my schedule and prefer sitting in an aisle seat. In contrast, my seatmate on the same plane was traveling to New York to visit a friend and would likely postpone or forego the trip if she perceived the price to be too high.


Gain pricing prowess

If you want to learn more about the strategies employed by the best pricers and more importantly how you can improve your pricing skills, and if you have position in which you’re tasked to develop pricing models as part of your regular duties, then I strongly suggest you consider attending Pricing for Profitable Decision Making. 

When I talk to business people about adapting the airline pricing model for their industry, I hear comments like:

“Sure they can do it, but I can’t – too much competition”

“They have more data than I do”

 “That may work in the airline industry, but there is no way my customers would put up with that”

 “That may work in B2C, but that would never work in B2B”

In fact, pricing is often the most efficient organization lever, but often the least used. This is usually because it is an area that suffers from a gap in expertise. This course will expose you to strategies to take back to your organization and improve your pricing prowess. You'll learn the answers to these questions: Why does it matter that I was going for a conference while my seatmate was going for pleasure? How can you charge different (higher) prices than your competitors? Why pricing capabilities does your firm need to make pricing a strategic tool? What role do collaborators play in your pricing success?

Don’t leave money on the table

In this course, we will look at case studies from a variety of fields, finding those who have priced poorly and those who have gotten it right. The three-day session will be especially helpful for those facing pricing challenges, such as industries which are under price pressure from competition, those with mature products who are trying to maintain profitability, or companies growing into new markets or offerings. We’ll be working on the skills you need to be a successful price developer in a number of complex situations.

Join me April 10 to 12

In our time together, you’ll gain expertise in the capabilities needed to do pricing well, no matter what level of experience you have on day one. You’ll gain the courage to make the pricing decisions you know you should make, and you’ll be having better conversations with your customers and the community as a result.

Learn more: https://carlsonschool.umn.edu/executive-education/courses/pricing-profitable-decision-making

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