The price is.... well whatever you want to pay

[Bewdy]

I went to blue water shopping centre on friday. As a northerner I already felt out of my depth with some cockney accents. Some lovely girls at a massage concession asked me if I'd like a head and shoulder massage, so I enquired on the price and they said, you pay whatever you like, whatever you feel is acceptable, ?!?! I was rather taken aback, and rather than having a free 10 minutes massage, I declined the offer. I enquired a little further about this pricing strategy and asked what people normally pay, and the girl said, normally at least a tenner.

Anyone have any thoughts on this highly risky pricing strategy? How does one plan a business around this finger in the air pricing policy. I wondered if it had been put in place to try to determine what the market will tolerate in terms of pricing, but you'd think the business owner would haved planned the business a bit better than this.

Cricually, very few people having massgaes too.

 

You win some you loose some.

I guess they know on average people pay up.

Maybe if you don't pay you end up with a few extra aches and pains.

Earl

 

[AndyBlue]

Reminds me of a trip to Egypt, was talked into having a trip round the town by one of the carriage drivers. When asked how much it was he stated 'You pay what you think it was worth.' So did the tour paid what I thought it was worth (can't remember how much) and then he promptly started moaning that it wasn't enough !! Took the view that he would probably have used this tactic whatever i paid.

As for massages, the actual cost of doing a massage is minimal above the fixed costs of labour etc so they are probably doing it on the basis of if someone pays £1 it is £1 more in the till than if they hadn't done the massage at all.

 

As for massages, the actual cost of doing a massage is minimal above the fixed costs of labour etc so they are probably doing it on the basis of if someone pays £1 it is £1 more in the till than if they hadn't done the massage at all.

Have you seen Blue water rents?

http://www.retail-week.com/bluewater-tenants-call-for-nil-increase-at-rent-reviews/1323495.article

Earl

 

[ThePublisher]

Did they look like a load of candidates for next year's Apprentice show?

 

[AndyBlue]

Have you seen Blue water rents?

http://www.retail-week.com/bluewater-tenants-call-for-nil-increase-at-rent-reviews/1323495.article

Earl

Not saying its a successful business model, just the one that they are probably adopting.

 

[Stephen Berry]

in summary, 3 approaches to pricing:
1. Cost plus: what it costs you to procure plus a mark up
2. market based: subdivides into 2a: competitor driven (what they are charging and where you pitch in relation to that) and 2b: customer driven (the customer makes a judgement of what they are willing to pay).
3. value based: the price relates to the value derived from the transaction.

All have their nuances and all are appropriate and inappropriate in different circumstances (I'm working in Zurich in September with a company going through their product range to explore exactly that concept - which approach is most appropriate for each product).

The 'pay what you want' approach has been used variously - more famously in a small number of restaurants. To my knowledge, none have successfully held that startegy for any significant time.

My opinion of this strategy of the masseuse is that they think they are doing pricing option 3 but in reality it is option 2b - in which case they ought to pitch in at a specific price so that they do not drive away those who dislike uncertainty and do not attract the unreasonable 'want something for nothing' customer.

Does that make any sense?

 

[Becky Midgley]

It really does smack of the business approach to tourists in India! I'd love to think this was a viable business strategy for the business owner and offered a fair deal for the consumer, but I think it just makes people feel uncomfotable.

 

[vvaannmmaann]

Bewdy,they are still there!

 

[MASSEY]

I went to blue water shopping centre on friday. As a northerner I already felt out of my depth with some cockney accents. Some lovely girls at a massage concession asked me if I'd like a head and shoulder massage, so I enquired on the price and they said, you pay whatever you like, whatever you feel is acceptable, ?!?! I was rather taken aback, and rather than having a free 10 minutes massage, I declined the offer. I enquired a little further about this pricing strategy and asked what people normally pay, and the girl said, normally at least a tenner.

Anyone have any thoughts on this highly risky pricing strategy? How does one plan a business around this finger in the air pricing policy. I wondered if it had been put in place to try to determine what the market will tolerate in terms of pricing, but you'd think the business owner would haved planned the business a bit better than this.

Cricually, very few people having massgaes too.

It's not high risk business is it. Where are the material costs for this massage? There are none...

 

[Scott-Copywriter]

It's a very poor idea. It simply makes clients feel uncomfortable. There needs to be some sort of guide price, so clients can pay above that if they feel it was worth it. Even that can cause some pressure though.

 

[JohnnyCash]

I think it would just make me uncomfortable enough not to take the product/service at all. I'd shop elsewhere and knowing the price up front.

 

Living round the corner from Blue Water I have availed myself of the sevice on 4 occasions and was quite happy to pay.

Unfortunately neither of the girls had change of 20 pence.:|

Earl

 

[MyAccountantOnline]

I think it would just make me uncomfortable enough not to take the product/service at all. I'd shop elsewhere and knowing the price up front.

That's exactly how I feel - I like to know what I'm paying.

 

[Bewdy]

It's not high risk business is it. Where are the material costs for this massage? There are none...

It only strikes me as high risk as there were 4 shop employees, the stand itself which won't be cheap, and the business owner as far as this pricing model suggests has no definite way of predicting their turnover, particularly in this time when people are wanting to spend less.

 

[JohnnyCash]

Plus your competitors could wreck havok with your business by repeatedly sending their friends/family to tie up your staff on jobs they were going to get paid 5p for.

 

[QuickHomeBuyers]

I just hope they arent some sort of THAI massage girls. lol

 

[matt seymour]

There is or used to be a carpet cleaning company who used exactly the same approach and they claim to have had a lot of success with it. If nothing else, it's different I suppose.

As others say, I like to know what I am expected to pay. An offer like this kind of puts the customer under pressure. It wouldn't appeal to me personally.

 

[JohnnyCash]

The only people I can see it actually appealing to are the customers you wouldn't actually want - the ones who'll just take the p*ss and deliberately underpay.

 

[KateCB]

The massage business 'pay what you think its worth' has been around long time - started in offices with a 10 minutes 'break' massage offered to desk bounds employees. Expanded into pubs and clubs both North and South.

The masseurs DO have costs, training (NOT free) travelling (NOT free) Insurance (NOT free) equipment such as chairs/head massage supports (NOT free), pus in the case of Blue Water, rent, rates, business insurance (in addition to professional indemnity insurance) so a tenner in London for a 15 minute head massage is cheap - although it is different, my local masseur charges £35 for an Indian Head massage, it does last around 40 minutes, and she comes to you, complete with equipment, oils if requested etc.

 

[Bewdy]

It's curious, really it's an ideal proposition for a customer in some ways, pay as much as you like, and for a luxury service such as a massage perhaps they catch a lot more business this way. But it's funny how it appears to make people feel uncomfortable as customers. My old barber used to only charge £7 for a haircut and I almost always paid £10 as I was happy to pay more and tip. Perhaps a more sensible strategy is to have a minimum modest cost and suggest that tips are anticipated?

 

[AndyBlue]

The masseurs DO have costs, training (NOT free) travelling (NOT free) Insurance (NOT free) equipment such as chairs/head massage supports (NOT free), pus in the case of Blue Water, rent, rates, business insurance (in addition to professional indemnity insurance).

It has been acknowledged they have costs but they are fixed costs and will not change the more massages they do. They won't need more training will they ? All they need is a bit of massage oil and some paper towel for the bed possibly or a towel wash very small costs. So once fixed costs are paid each additional massage they are pretty much into profit.

 

[KateCB]

It has been acknowledged they have costs but they are fixed costs and will not change the more massages they do. They won't need more training will they ? All they need is a bit of massage oil and some paper towel for the bed possibly or a towel wash very small costs. So once fixed costs are paid each additional massage they are pretty much into profit.

Have you seen the cost of quality massage oils? Large rolls of lint free paper for beds etc?

Isn't that the same for all businesses that offer a service - once the fixed costs are paid then they are pretty much into profit - and incidentally, isn't that the idea of business?

 

[MH1]

10 mins with the girls massaging you and I reckon most guys will be quite generous, I enjoyed mine at the NEC, but at the exhibition I was at it was totally free. Shame they were so busy, would had bought the girls a few drinks.

 

[Nick Dougan]

I've ignored those sort of booths at Bluewater too. I've not been there for a while, but I bet you'll find something similar at the Metro Centre,m too - or is that too far north for you

If I have a sore neck I go to my osteopath who takes a very predictable £45 from me for 30 minutes of his time; I console myslef that my hourly rate is rather higher.

I think that Stephen has put his finger on it, but it must work, or they'd soon be out of business. The idea of altennative fee arrangemenst is all the vogue in professional services, but there you know who it is you're entering into a business relationship with before you offer "value pricing", and you can turn down those who you'd rather not do business with. http://www.bb-ip.com/index.php/flexibility/

Value billing, and unconditional client satisfaction guarantees are, I think, a brilliant marketing position. On the face of it they aren't suited to a pitch at Bluewater, but who knows?

Nick
www.actioncoach.com/nickdougan