Marketing thought of the week – The price is right? Think again.

What do you do in an era of diminishing demand? How about slashing prices? Or at least changing your pricing model? There seems to be a lot of this going on.

Although it doesn’t appear to be widely embraced just yet, attorneys are broaching the idea of moving away from the billable hour – hold off on the obit. They, like ad agencies, are looking at value pricing – linking their fees to results. Their one-time deep pocketed clients have seen their revenues diminished to the point they can no longer afford paying big monthly retainers or sky-high hourly rates. The firms either have to consider revamping their fee structures or risk losing clients to less pricey competitors.

For the first time a major league baseball team, the San Francisco Giants, is using software to set game prices – on game day - based on the quality of the competition, the weather, the pitching matchup, and other elements. Just like the airlines they are looking at “load factors” and making pricing decisions on the fly.

Are these types of structural changes to pricing going to last or will we gradually see their use erode as the economy strengthens? I guess time (and results) will tell.