How to play The Price is Right when you’re setting the Prices.

I had lunch with a peer recently who was in negotiations for a couple days’ space rental and was up in arms because his negotiating adversary wasn’t moving from her position.  The negotiation went something like this:

“It’s $X.  We can’t move from that.”

“But the space is empty.  You’d rather have nothing?”

“It’s $X.  We can’t move from that.”

My friend and I both know the financial state of this location, and we both know they could use the cash, so we were curious about the hard line they were carving in the sand stone.  We also wondered what the board members might think about the potential loss of revenue if my buddy walked away from the deal.

And he did.

Of course, holding a hard line does have its purpose.  Protecting your price, especially when you have an in demand product is important in order to maximize profits.  Sure, you may lose some folks, but you’ll earn the same amount from the people that do come.

While this situation was about a space rental, the same scenario happens when dealing with all sorts of products, including theater tickets.

I find that there are three types of “Pricers” in the market:

1. The Stubborn
   These folks won’t ever move from their pre-established price, no matter what.  Their ego or their laziness gets in the way, and they just sit on their price and pray that in the long run it will work out.
2. The Desperate
   There is no full price for The Desperate.  They are ready to discount and cut a deal in the same breath that they tell you the price.  You can smell The Desperate, and it ain’t pretty.  And the last type is the type that we should all endeavor to be.
3.  The Flexible
   By examining the time of year, market conditions, who is making the ask (could this individual bring more business or more ticket buyers if I can get them in for a deal), availability, and so on, The Flexible can go this way or that way based on demand, creating a win-win for the buyer and the seller.

But in today’s economic environment, flexibility is the key to long term success.

The Price is Right can’t be played today.  Because the Price could and should change from one moment to the next.

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