Crying Tiers!

Pricing strategies for business can sometimes be a very difficult conversation. Everyone seems to have a different perceived value of the product or service a business offers. It doesn't matter if your working with tickets, products or services, the trick is hit a price structure that fits the majority of the target market. This may require some market research: surveys, polls, or simply a few conversations. Once you've established what your market thinks its worth you can start to play with a tier marketing structure to push sales. Similar to belated price drops to milk the early adopters. Xbox, iPhone, and PS3 have all done this, along with a few of their own reasons.

Something to remember for Arizona is that they are notorious for being "late committers". If you're holding an event you can expect the majority of the people to sign up or buy tickets only a few weeks before the doors open. However, you can still push a perceived value onto the market. I don't mean this to sound greedy, but if its done right, you can't be blamed for not giving people a chance. The idea is to get a tiered structure based on time. Early tickets are cheaper as a "thank you" for an early commitment. As the event comes closer you push prices up. This creates a very good feeling to the early adopters, and to the late adopters perhaps a feeling that the value is greater.

You have to be very careful. Remember there is a range to the perceived value, and if you exceed that you might stifle your sales. There is a careful balance between price, demand, and supply. Sometimes a higher price also pushes sales because you've broken into a different part of the consumer conscious: a higher price means better quality. Again, its all dependent on your target market demographics.

You also have a few options with tiers. You can do discounted bundle tickets, 2 for the price of 1 and a half, etc. The time tier is also very popular, and works well with events. For product and service pricing your tiers should work with the amount or detail the consumer receives. Take a look at cellphone contract options or even a carwash. When introducing something new to the market you might even want to offer something for free. Let them have a taste, and get some feed back. Just make sure that you don't get too complicated.

Above all, never underestimate yourself. Its easier to discount prices if your feedback shows that people feel its too expensive. But its more difficult to move the other direction. The last thing you want to do is lose revenue because you undercut your pricing structure.