Wednesday, March 13, 2013


No, I'm not talking about Key Performance Indicators. My KPI stands for Keep Pricing Intuitive.

Look at how Southwest Airlines presents its pricing (on the left). It's a thing of beauty. Three categories: "Business Select," "Anytime," and "Wanna Get Away." It's clear what the purpose is, and it's pretty clear that the Wanna Get Away seats will disappear first, then the Anytime, and finally the Business Select.

Why does an intuitive pricing scheme matter? It communicates to your customers something about your brand. In the case of Southwest Airlines, they are saying, "We provide excellent value and make it easy to do business with us." The pricing scheme fits perfectly with the brand image.

I wish more companies, including my own, would understand the value of simplicity and intuitiveness in pricing. That doesn't mean you have to be the lowest price or even the simplest system as long as the pricing is consonant with your brand values.

Simplicity in pricing helps internal people explain what's going on (especially Customer Service). It helps explain to current and potential partners and customers the value of moving to a higher level of engagement, commitment or partnership. And it makes it easy to justify why one customer gets one price and another customer gets an entirely different price, even if those prices are unbelievably different.

For most businesses, salespeople want to get price out of the way in order to talk about the value the product, service or solution can bring. In my opinion, the only way to do so is to make pricing easy to understand. If the salesperson can explain it simply, the conversation is short, allowing the sales representative to focus on more important things such as value-in-use (to justify why your prices are higher than those of your competitors).

Can anyone tell I have been struggling with pricing issues this week?

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