My daughter graduated from high school two weeks ago, and I was a proud papa watching her receive her diploma. I also listened closely to all the speeches from the principal, the administrators and the students. One of the speeches struck me in particular; Kelsey Kirby, a graduating senior, posed the question “What if?” Her theme was centered on the concept that great things are only accomplished when someone asks “What if”. The Wright brothers asked “what if we could fly?” Someone asked “what if we could make a computer fit in a pocket?” By asking that simple question, big progress was made. Kelsey encouraged her classmates to have the courage to pursue bold ideas in their lives, and be willing to ask “what if I could change it?”
Whether Kelsey was talking to me or not, she got me thinking about how many times the question “what if we priced it differently?” has been asked in my life. It did not take long before a number of examples came to mind:
- What if we offered a discount for self-service gas, but charged more if we pump it?
- What if we sold food on the plane instead of including it in the price of a ticket?
- What if we did not include checked luggage in the price of a ticket?
- What if we offered an option to board the plane early – for a fee?
- What if we added a fuel surcharge to the invoice to reflect the high cost of fuel?
- What if we offered free delivery of stocked items in exchange for an annual subscription fee?
- What if we charged higher prices for the most popular games or events, and lower prices for the less popular events?
- What if we offered the lowest prices, but only when purchased in large quantities?
- What if we bundled the annual maintenance costs in the price of the car?
- What if we offered a convenience fee for getting tickets on the internet?
- What if we offered a substantially lower price on health insurance if the customer will take a substantially higher deductible?
I could keep going, but you get the idea. It is logical in any business to say “These are the norms in our industry. If we do something different, we will lose business. If we do anything that looks like it is increasing our customers’ costs, competitors will sell against that and take business from us.” However that mindset will never change the game. Instead, think about what changes you can make that will be sensible to customers and competitors. Are there changes that would change the risk profile to the party better able to control it? Are there changes that would create new incentives to benefit both parties? Are there changes that address a need and that customers would be happy to pay for?
Keep in mind your customers buy from you for several reasons, only one of which is price. If your products and services provide value and your customers like doing business with you, they have reasons to keep buying from you. If you have a reputation of identifying customer needs and then serving those needs, make sure your pricing structure change is consistent with serving those customer needs. If those are true, your customers will not want to switch for small economic changes. Also keep in mind your competitors are trying to make money too. They will often follow a change in price structure that makes sense.
Asking “What if?” does not mean taking foolish risks. It does mean looking at your markets and environment and looking for alternatives that can change the game. It means not being constrained by the way things are, and considering the way things might be. There are plenty of examples where someone asked “What if?” and their entire industry was better off as a result. Don’t be afraid to ask “What if?” and lead your industry.
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