Individual Prices

How many times have you sat next to someone on the plane and compared fares? Invariably you could never see the logic of why your fare was different from someone else. Accenture was part of the cause of this optimal pricing when various complicated pricing algorithms were programmed for industries (hotels, airlines etc.) with fixed capacity that is wasted when time expires (e.g. flight takes off, hotel room goes unused).

The software industry prices their product on the "ability to pay" (the bigger the company - the more you pay). After all the incremental (marginal cost) cost of an additional copy of computer code is nominal compared to the development and maintenance costs. Consequently pricing can be highly subjective and variable.

Consumers get very irritated when they find out someone else got a better price. We don't think that what we have paid - when we paid it - was a consious price/benefit evaluation. What we paid must have been fair at that time or else we would not have purchased the item. Somehow the value changes once we know what someone else paid.

Time Warner in their last billing indicated a price increase effective 11/2010 - but it only applied to those individuals who have are not on a 2 year contracted price program. In January 2010 I switched my cable to digital (long story that requires a different blog). In the space of 10 months the price had changed 4 times - $62.99;$54.95;$44.95 and now $72.99. Each time the price changed with a phone call or new information I obtained.

The lessons - everything is negotiable; prices are individual; value is related to what someone else paid; keep asking - keep calling - keep evaluating value.