‘Name Your Price’ is a pricing strategy that allows customers to propose the amount they would like to pay for a product or service. This strategy gives customers the perceived power to negotiate and pay an amount that they feel is fair and within their budget.
One of the main advantages of the ‘Name Your Price’ strategy for businesses is that it can increase sales by appealing to price-sensitive customers. By allowing customers to propose a price, businesses can reach a wider range of customers who may not be willing to pay the full price for a product or service. Additionally, it may also appeal to customers who are looking for a sense of control in their purchasing decisions.
The ‘Name Your Price’ strategy can be used in a variety of industries, including travel, entertainment, and retail. In the travel industry, some airlines and hotel chains have implemented ‘Name Your Price’ programs that allow customers to bid on unsold seats or rooms. In the entertainment industry, some ticket vendors have used this strategy to sell last-minute tickets to shows and concerts.
Another industry where the ‘Name Your Price’ strategy has been used is ecommerce where it lets customers make an offer on a product or a service. This can increase sales by allowing businesses to convert browsers into buyers or to clear out overstocked or discontinued items.
The simple 1-round ‘Name Your Price’ strategy can be inefficient for some businesses. As it is the seller that defines the range of acceptance, it is difficult to predict what prices customers will offer. To mitigate this risk the ecommerce businesses provide no price guarantee and require buyers to wait for price confirmation. Buyers have been finding these two modifications so substantial, unwilling to wait and not get the sale in the end, that it can devalue the ‘Name Your Price’ strategy altogether. This has been improved in a multiple-round ‘Electronic Negotiation’ strategy, which is a natural extension of the plain ‘Name Your Price’ strategy.
The main advantage of allowing multiple rounds of electronic negotiation is that it can help to establish a more fair price for both the buyer and the seller. By allowing multiple rounds of negotiation, businesses can get a better sense of buyer budgets and their willingness to pay, while buyers can get a better sense of the seller’s bottom line. Additionally, electronic negotiation provides a more objective view of the negotiations process, as the use of automation and digital tools helps minimize the influence of emotions and subjective biases in the negotiations process.
Both ‘Name Your Price’ and ‘Electronic Negotiation’ strategies are powerful tools for businesses looking to increase sales and appeal to price-sensitive customers. They are the natural alternatives of the common fixed-level pricing, and will continue developing, empowered by new technological advances.
