Pictures of the bike I've been riding have become a minor internet craze today. I now wish I'd cut the rear brake cable housing a bit shorter. But that's not what I want to talk about.
A big initiative of his was to do away with coupons and specials and sales and just go to a strategy called "fair and square pricing." The thrilling sounding name notwithstanding, it's an idea after our own hearts - don't make people jump through hoops or hit the timing just right in order to get their best deal, just make your best price THE price and go that way. At Penney's, it's been a resounding failure. A professor at Columbia says "this game of cat and mouse with regular, ever-changing discounts is illogical, but it's one that lots of consumers like to play." I can't disagree with his assessment, but we're still not doing it.
A lot of cycling gear is made available through discounts and bro deals and team deals and shop nights and all of that stuff. People are trained to ask for discounts and we understand that, which is why we really don't tear our hair out when people ask us for discounts (we used to - oh, how we used to). On the other hand, we are a lot less wordily apologetic about our strategy and our adherence to it. If we lowered the prices for some, we'd have to raise them for everyone else. It's that simple. We had a few special cases when we started, we discovered that it didn't work well for us, and we ended them quickly.
Using stuff because you got a good deal on it is a promotional thing, but in our view it's a pretty poor one. It's usually a case that you're using it because you got a screaming deal on it, not because it's what you really wanted to have, and people recognize that. We don't want to create a bunch of demand for our stuff at x% off of our normal prices, simply because we already charge the least we're willing to get. The market would likely bear more, and there's plenty of evidence that broad swaths of people would bear a lot more. We're about to launch a wheel set that legitimately plays ball with anything out there, and it's going to cost around half of what the market rate is. We hope that it's an attractive proposition for a ton of people. We've spent enough time telling people how we do that, but there will still be skepticism because of the price.
It is what it is, that's the way we do it, and we're willing to be wrong.
8 comments
This is of particular importance to me the higher the cost of the product. Trying to get the best price from a car salesman is the most frustrating and stupid practice in the world. That is why I like Scion's pricing strategy.
Darn – I was just going to ask for a discount and bro deal. Lip
I love your pricing strategy and views on sponsorship. As an amateur, I feel no need to buy products that include a 'protour team' tax, and I'm embarrassed by fellow 40+ racers (people making 6 figures…) who are scrounging for team deals and discounts. Please keep this up. Good products a good price, for all. I don't own any of your products yet, the Hot Buns frame and Rail wheels are in my sights though. That new road frame looks sexy too.