Pricing Principles in other Areas

Interesting. I just read an article about congestion pricing. I had no idea that it was becoming that commonplace. Implementation aside, I wonder how well we can use this to drive behaviors.

Everybody knows promotions are meant to drive buying. Demand pricing is two-fold: it’s meant to either capitalize on the increase, or slow down the demand. Or both.

If we lower the price of an item in retail, it’s meant to increase the velocity. Whether that’s a markdown, promotion, or just a new strategy, that’s always the end goal. When a restaurant does a promo (3 course meal, free desert, 2-20, etc.) it is always meant to drive traffic and move specific items (which I hope are margin builders!) Elasticity 101.

I’m curious how well this applies in other areas. And at what point does it become a little too Orwellian? Do we make people pay to drive on certain lanes of the freeway? Well that’s been happening for 20 years now. Will people pay extra for better seat locations on the (same) airplanes? Also been a common practice for a little while. Even early boarding is a form of a surge price. And obviously Uber has been using this since day one.

If we watch behavior, can we modify it to achieve desired results? In the case of traffic, less cars, less traffic, less pollution. That’s a win.

Dynamic pricing in its infancy was awkward and inconvenient. But now it’s becoming so mainstream people don’t even blink about it- or better, don’t notice it. Maybe that will be the new model.

Is there a huge difference between event or surge pricing and premium pricing?

Was Pay-per-view on your television pretty much the beginning of the event based pricing? HBO? Extra sports channels on your TV? Also premium. When I was young, Mike Tyson fights were on HBO. That’s why you had it- and some movies. Now? All big fights are PPV. (I know, that dates me!)

Same question on NFL Sunday Ticket: it’s still DTV exclusive for a little longer. I don’t want to pay $400 for all the games, but I would be $25 for specific ones. Give me a menu, and price it based on MY behavior. I won’t pay 400, but DTV would get a little more revenue.

You wonder at some point if things will be truly a la cart and then pay a premium for premium channels and premium services. I’ve been hearing big cable TV talking about this for years.

What’s the next frontier going to be? And as a better question do we have the technology to drive this using AI? Is this the next best use case for AI in society?

Marry the price to the demand to the consumer then blend in personalized and targeted marketing. That would be hard to beat.


Aloha Friday, #DataNeds

-That Planning Guy

Play Ball

It’s officially Spring, and Opening Day!

Why is opening day so fantastic? Because for the one time out of the year, everybody is optimistic, everyone is even, and feels like they have a shot at winning. There really isn’t another time in sports- or in Life- that you can say that. Optimism reigns supreme.

All of the moves in the offseason, all of the retirements, all of the trades, all of the player development, all of the improvements, all of the injuries, all boil down to one thing today: is the team going to be better or worse than the rest of the teams.

In individual sports, you are competing against yourself and a perceived field. No matter how well you play golf, how fast you run or swim, how fast you go down the hill on your skis, you are competing against yourself and a clock or a scoreboard. But also against the other people in that same event. You can break the world record in swimming, but the guy next to you might still beat you.

But in the team sports you’re only competing against other teams and relying on your team to bring their best, and they on you. If your team improves, but the competition improved more, you repressed. Sorry.

All of the posturing in the offseason, all of the experts predicting Championships, all come to an end today as actual facts come in.

A whole new set of data to analyze, #Datanerds.

Happy Opening Day, and as always, Go Sox.

I still am,

That Planning Guy

PS- I read the ” experts” predictions this morning. Almost all were Yankees, Red Sox, Dodgers? Really? Way to go out on a limb, guys.

Frictionless Commence

I hear this phrase so often a conferences I attend. But I think the meaning has so many different versions.

Some people believe Uber is the pinnacle of frictionless commerce.

I am starting to think more like Starbucks version is where I want the world to evolve. this morning I ordered my coffee from the car from the parking lot simply because it was easier than explaining to the person at the register what I actually wanted.

So has the convenience of ordering on an app and picking up in-store superseded a avoidance of human contact? Or is it just an evolution.

I like the order online and pick-up in store method because I actually don’t like the idea of “shopping.” But is that because of the lack of service? I can’t imagine in ” fine dining” being able to order from a tablet on the table and just having the food come. The interaction with a waiter, sommelier, barrister, should still be an experience. Tell me why I want the Peking duck ? (I do!)

If you order an Uber and it’s a driverless car, does that make the experience even better then? Or is human contact something people actually want?

Frictionless commerce, like beauty, is in the eye of the beholder.

That Planning Guy

PS I renewed this site, so you’re stuck with another year of this.

Dynamic vs Base

I feel like I’m going to be explaining this again this week.

But in short, your base pricing has to be correct or else your dynamic pricing is always going to be wrong.

No matter how hard you work at dynamic it has to start at something.

If you put things on sale from the wrong price, or you yield price from a bad beginning, you are just simply throwing money away.

This PSA brought to you by,

That Planning Guy


Ready for the Superbowl tomorrow on many levels.

First, it’s Patriots, so of course hoping to win. I’ve always been a die-hard fan.

But more, another day of analytics: Line opened at -1, moved to -3, dropped to -2 1/2. That’s a lot of space to make a bet and get some “middle.”

All sports betting is just applied analytics. Actually, hate to admit it, all gambling is. Craps- how to bet. Blackjack- hit or stand. And at the core of all gaming is the inherent house advantage. Can your math overcome a rigged game?

Are you on the right side of equation? Getting the advantage is the difference between long term success and short term winning (or losing) So how do YOU rig the game?

Be smarter. Be exacting. Be present. And be relentless. Endeavor to persevere. The last man standing wins in gambling. Be the enigma.

If everyone is cheating, the best cheater wins. Tip the odds. Make the dice go YO more than 2/36.

And for now — watch a 41 year old QB dominate in a Superbowl against all odds.


From a Poolside Cabana, I am

That Planning Guy


More ironic then funny. The old adage is not really true- Sometimes one door isn’t even closed before the next one opens.

Had a great catch up with an old friend today, who better start reading this. ( Still shocked she didn’t)

And to all those who have asked, no I’m not going to New York next week. Sorry fans. Just not going to be the same without being at NRF. kind of like a tree falling, does NRF count if I’m not there? Lol.

Dress warm, #Datanerds

From this side of the country, I remain…

That Planning Guy