Tuesday, May 11, 2010

Airline Pricing - WTH?

I went with "What the heck", not sure if that is a widely accepted acronym or not, but at the very least it is politically correct. I recently had to play the airline pricing game and I ended the game more confused than I entered it. This has been a long lived confusion and I have verified that I am not the only person who shares this confusion / frustration.

I would consider the pricing strategy an important element to any companies' success. It is an extension of the brand image you are looking to portray and it is a message to customers as to what they should expect from your company. Are you looking to be an elite provider or the low cost solution? Are you looking to market to the whole country or a small group of affluent customers? More often then not, a company will end up in the middle somewhere, but there are great companies on both extremes.

There is not a "right" pricing model necessarily, but there is a pricing model that fits your company better than the others and will allow your company to reach its potential.

Which pricing model have the airlines chosen? Some of them appeared to be pushing towards the low cost providers, but the more I search the more prices vary from day to day and cheapest carrier seems to vary from flight to flight, city to city and even within the same day. Just to figure out which flights are the lowest price could require two computers, an Abacus and a role of duct tape.

I ended up choosing Southwest for this particular flight, but I flew on Delta for my last flight and Frontier for the flight before that. I will applaud Southwest for at least sticking to their no luggage charge policy. Should I really need to look up the luggage policy for each individual airline to figure out what total cost will be per flight?

In the end, for the airlines, this comes down to a customer service issue. Do you want your customers to hate purchasing your product because it is a difficult and time consuming process? Do you want them to relate the purchase process with anxiety? How many other purchase environments relegate the customer to a form of gambling? Will the price go up tomorrow or down tomorrow? Is this the lowest the price will go or should I wait another week?

I think the worst case scenario for a business is having a pricing model and process that causes anxiety and confusion for your customers. Keep that in mind each time you are going to communicate to your customers. If you are straight forward with the customers they will know exactly what to expect and won't get any surprises. Good luck and if you have any flight searching tips make sure to share them.

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