Blog: Situational Pricing - Lessons from the Super Bowl and Uber | Strategic Pricing Solutions
Uber’s surge pricing received more attention last week with the large snow storm in the Northeast, when Uber agreed they would not “gouge” consumers. Prices would be higher than normal, but would not be excessive. Conversely, tickets to the Super Bowl on the secondary market were higher than ever. This past weekend, tickets in the upper deck, corner of the end zone were more than $12,000 each. Super Bowl tickets and surge pricing are both good examples of situational pricing strategies – adjusting prices according to the situation. How are you applying situational pricing?
I have written in many blogs that the value of your products or services is not the same for all customers, and it is important to segment your customers into groups with common value profiles. Similarly, customers are not all equally price sensitive and their price sensitivity varies from product to product. Situational pricing is really a similar concept – the value of your product or service to any customer changes depending on the situation. Nobody will pay $12,000 for an end-zone seat at a regular football game, but the Super Bowl is an epic, once-a-year event that people want to be a part of. People assign a higher value to the Super Bowl and their sensitivity to price is much lower than during the regular season.
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