Pricing Concepts Florists Should Master In 2017
Anchor pricing takes advantage of the way our brains work and lets us establish value by creating context that might not exist otherwise. The best example is a marked down price tag. The high "normal" price acts as an anchor that sets our expectation. In this context the discounted sale price that is displayed next seems like a great deal. If you have ever been tempted to buy something simply because it seemed like such a great deal you can probably blame the anchor effect.
Bundling is the practice of grouping complementary items and selling them as a package – consider the "combos" at your local fast food restaurant, or the snack specials at the movie theater. Unbundling is the opposite, charging separately for things that used to be included as part of a package – like airlines charging for checked bags. For the past couple of decades the flower business has been focussed on unbundling delivery fees and service charges, but there is a case to be made for offering bundles as well.
Hurdles allow retailers to selectively discount. Rather than cannibalizing full price sales by offering discounts, hurdles are an effective way of ensuring that only the customers who need the motivation of a discount actually get a discount. Hurdles can be a powerful way to florists to generate additional and still profitable sales to customers that would not pay full price, without losing money by discounting to those that will.
This is the practice of creating slightly different versions of a product that have a big difference in profitability. Having a more profitable version of a product (think about the organic section of your supermarket, or the business class cabin of an airplane) lets florists generate much larger profits from customers that place a high value on the product and are willing to pay more.
Price discrimination involves selling the same product to different people at different prices, with the goal of selling to more people and charging each customer the most they are willing to pay. It sounds strange but everybody does it – the trick is to make it voluntary by using things like hurdles. People that are serious about saving money will for example clip coupons or line up for Black Friday sales. Other people will cheerfully pay full price.