An Unusual Strategy for Price Tiering

Tuesday, September 15, 2015

I'm always excited when a company tries a new business strategy. Not long ago I examined Amazon's efforts to hide the price of its products from consumers. Not to be outdone, European discount airliner Germanwings is experimenting with hiding the identity of the product being offered.

That's right, the airline has customers pay for tickets to... somewhere. Only when payment is received does a buyer discover his promised destination. Though quite unusual, the firm is not alone in its tactics. Online video game warehouse Gog, for instance, is currently promoting its piñata sale whereby consumers have the option to pay $3 for a mystery video game.

If there is any steadfast rule in marketing, it must be that sellers should never go out of their way to hide the positive aspects of their products. Beneficial traits make products more desirable and allow sellers to charge more for them.

So why is Germanwings selling tickets without revealing their associated destinations?

Now that we've seen companies that don't reveal their prices and others that don't reveal their products, I'm waiting for the next great innovation. Would any company like to hide both at the same time? It could make for a very interesting business case!

Pricing is not a science. It's an art. If you'd like to apply pricing strategically to your business, contact me for a consultation. Alternatively, you can grab a copy of my book on software pricing.