Should the marine industry use surge pricing?
Mar 12, 2024
Recently, there was a significant backlash in the United States when Wendy’s announced they would be testing a “dynamic pricing” model where the cost of menu items would fluctuate based on demand. Public reaction was immediate and Wendy’s back-pedaled and brought out a special $1.00 burger offer to quell the anger. But, does it make sense to charge more when there is big demand and to offer better prices when demand is weaker?
Isn’t that what the airlines and hotels have been doing for years? Some people joke that no two passengers on the plane paid the same price for their seat. I just flew during March Break and it was much more expensive than if I could have travelled the week before. Could this work for the boat business?
Wendy’s quickly learned that raising the price during high-demand times brought nasty push-back. But would customers complain if burger prices were reduced during slower times? Seems not.
Does the boat business experience demand peaks? Absolutely! Spring launch, fall haul-out and across most of Canada, high season are all times when demand peaks, customers’ patience runs out and occasionally, good customers leave in a pique.
Repeating the Wendy’s mistake, we could slow that demand down with a big increase in “peak-season pricing” but that would cost us dearly in angry customers who take their business elsewhere. I have no brilliant ideas on how to reduce the pressure of the May 24 weekend, although the un-seasonable warm weather in some areas this year could give us a head-start on spring launch. It does seem logical to offer incentives to encourage customers to get their boats serviced in the off-season. That could reduce the high-season demand for repair work. At the same time that could increase the shop revenues overall; clearly a win for the marina and the techs too.
I feel confident that there are already many marinas and dealers who have a good system to maximize both revenues and customer satisfaction but could your business improve your results? Does the Wendy’s example give you any ideas?
Andy Adams-Editor
