Price transparency

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  • Price transparency

    1. 1. The High Cost of Ignoring Value Price Transparency in a Connected Age
    2. 2. Agenda <ul><li>Internet usage drives price transparency </li></ul><ul><li>The impact of the mobile Internet </li></ul><ul><li>Responses </li></ul><ul><li>Results </li></ul>
    3. 3. The Internet enables price transparency
    4. 4. And it integrates marketing and distribution channels
    5. 5. Oh. And it’s growing Source: Compete.com (http://siteanalytics.compete.com/expedia.com+kayak.com?metric=uv)
    6. 6. Mobile? Even more so 4Info Slifter.com
    7. 7. Growth of mobile Internet <ul><li>3.3 billion mobile phones worldwide </li></ul><ul><ul><li>50% market penetration worldwide - in 26 years </li></ul></ul><ul><li>50% of Americans over 65 have mobile </li></ul><ul><li>58% of all American adults use mobile for non-voice, data application every day </li></ul>
    8. 8. Possible responses <ul><li>Race to zero </li></ul><ul><li>Transparent value </li></ul>
    9. 9. Race to Zero RyanAir “$20” flight LON-BCN Source: Wired Magazine
    10. 10. Requirements <ul><li>Rational pricing per add-on </li></ul><ul><ul><li>Skewed pricing to maximize revenue </li></ul></ul><ul><ul><ul><li>$17 per minute phone service </li></ul></ul></ul><ul><ul><ul><li>$62 Continental breakfast </li></ul></ul></ul><ul><ul><li>Unhappy customers </li></ul></ul><ul><li>Risk tolerance </li></ul>
    11. 11. Transparent value programs <ul><li>Rate parity/Best Rate Guarantee </li></ul><ul><li>Breakfast included </li></ul><ul><li>Guaranteed dollar program </li></ul><ul><li>One More Night </li></ul><ul><li>Leading Suites </li></ul><ul><li>Amazon Free Shipping </li></ul>
    12. 12. Successes <ul><li>Transparent value programs generate 15% higher prices </li></ul><ul><li>Customers participating in transparent value programs stay 17% longer </li></ul><ul><li>Revenue per reservation 35% higher </li></ul><ul><li>34% incremental business </li></ul>
    13. 13. Conclusion <ul><li>The future is already here, it’s just not evenly distributed </li></ul><ul><li>The internet creates price transparency </li></ul><ul><li>Marketers need to ensure their value is equally transparent </li></ul>
    14. 14. Thank you

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