Note: This is a more detailed post on how pricing models can get you publicity. To read about 7 more ways to earn media attention, read my guest post on HubSpot blog.
You’ve been taught not to compete on pricing… They say, “Sell on value, not pricing, because someone else can always go a few pennies lower.” So, you look somewhere else for the differentiator, distancing yourself from pricing as much as possible. While there are millions of successful entrepreneurs which took this exact path, others have broken this rule and have gained publicity, new customers, and a unique selling point! There are always exceptions to the rule — and unique pricing strategies, such as pricing products based upon the temperature outside, seem to be gaining ground.
How can a unique pricing strategy benefit your business? Let’s look at four examples below.
“Pay What You Want” Model.
The “pay what you want” model has been around for many years and is primarily used for charity events and donations. In 2007, a popular band Radiohead used this pricing system for their album In Rainbow, which applied to the digital downloads. Since then, Panera Bread and even a conference (Inbound Marketing Summit) tried this model with their customers.
This “pay what you want” model has its risks. There is always a chance that the customer will pay nothing. However, according to those who have tried it, while some customers pay less, others pay more and it usually evens out. Before implementing this strategy, consider doing a test run for a limited time and posting a “recommended” price — after all, you don’t want dozens of new customers who hardly allow you to break even!
Demand-Based Pricing (Similar to the Stock Exchange).
This is an interesting one. This is a completely unique pricing system that has been adopted by a Barcelona bar called Bar Dow Jones. All of their drinks are treated like stocks, which increase in price when the demand goes up. If I purchase a Heineken, the next person who buys it will have to pay more — unless, of course, there’s a crash! — the next buyer will get that beer at a bargain price.
This real-time pricing, also published on their website, was custom programmed for their POS system and it seems to be paying off by attracting tourists and publicity.
Pricing based on an External Factor (Weather, Stock Exchange Closing Price, Game Results).
Wouldn’t it be nice to pay less for a refreshing beverage on a hot sunny day? Visit Spain! There, Coca-Cola-owned Limon Y Nada has recently installed 18 special vending machines that charge a different price based on the current temperature. The hotter it is, the lower the pricing!
Another execution of a similar idea is by Bull & Bear Steakhouse in New York. Imagine that you’ve invested money in Facebook, but the next day the stock drops 2%! Although it is not a reason to celebrate, Bull & Bear Steakhouse gives you a reason to stop by: cocktail pricing is attached to the Facebook stock’s gains/drops. This is a summer-long social media promotion, designed to attract a young crowd into the bar.
Charge Certain Customers More!
It might not be appreciated by your customers, but in the right circumstances, can get you publicity. Just recently, Kogan Electronics Store was covered by major tech blogs because they charge an “Internet Explorer 7 Tax.” With a plethora of modern internet browsers available, consumers are usually slow to upgrade, preventing developers from using modern technologies and requiring them to spend hours troubleshooting and working around the bugs of old browsers like IE7. Therefore, a modest 6.8% tax is charged — .1% for each month since the 8th version of the browser was released.
Can Pricing Stunts Work For You?
In a competitive environment, businesses need to stand out. While some businesses do that by buying placements in the media (expensive and not accessible for most SMBs), businesses described in this article are earning media by doing something worth talking about. Customers unfamiliar with these kinds of pricing strategies will spread your message further to their friends and family, while industry journalists and bloggers will approach you for coverage… The classic inbound marketing example!