Managing Director & Senior Partner
Munich
Related Expertise: Pricing and Revenue Management, Marketing and Sales
It’s said that timing is everything, and that rule certainly applies to pricing. An often overlooked factor in driving purchase decisions, timing can be applied to nearly every pricing approach, from discounting to cross-selling, to achieve “just-in-time pricing.” A company in the travel industry, for instance, was able to sell more than 90 percent of its unsold inventory, increasing net income margin by half a percentage point, simply by splitting up the purchase decision over time. The company found that consumers were more likely to purchase an upgrade or an add-on amenity when contacted close to their travel date than when presented with the same offer at the time of the initial purchase. With little investment—just a small change in strategy—the company more than doubled the success of its upselling efforts.
Strategies such as this are especially relevant now, when companies are seeking growth avenues compatible with their customers’ tight wallets. Raising prices across the board often is not a viable option in tough times. Just-in-time pricing can help drive overall profit through improved discounting, cross-selling, upselling, bundling, and unbundling of offerings.
Author
Just Schürmann
ABOUT BOSTON CONSULTING GROUP
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.
Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.
© Boston Consulting Group 2024. All rights reserved.
For information or permission to reprint, please contact BCG at permissions@bcg.com. To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcg.com. Follow Boston Consulting Group on Facebook and X (formerly Twitter).