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.
At various points in my career, I’ve been a Stubborn, and I’ve been a Desperate . . . and both can sometimes make you feel good in the short term.

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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Comments
  • Carl says:

    I have never understood people who won’t drop the price of an empty space. I have had fruitless negotiations with people who wouldn’t drop the price of a chronically empty space.

  • Paula says:

    I appreciate your (Ken’s) opinion to maintain a flexible attitude for pricing in this economic “climate”.
    Imagine many couples with children wanting a night at
    the theater. The cost of tickets, child care (if
    necessary), transportation, and a possible dinner, are
    out of the reach of many people. Great shows have
    closed, because tickets sales declined.

  • Chris says:

    Then there are shows that won’t let you pay them MORE. I had a back center mezz seat in the last row for Grace on Tuesday.

    I asked the box office twice if I could move up, and I said I would pay. I had seen the show on the TKTS board minutes before so I knew they had seats available. No, no they told me.

    Then I climbed up to my row. The mezz was empty except for the packed back two rows that had a $35 deal.

    The usher moved me up to the front of the mezz on the aisle when I asked politely. That’s money they could have captured.

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