Say you walk by an ice-cream shop, car-wash, parking garage, food truck or lemonade stand. You catch something in their price list. Be it the order in which the options were listed, the font of the prices or that the prices all end in 9. In some cases you see no prices at all.
For most these signals trigger nothing, we get our ice creams and tacos and move on. For some, who have a blog, these are triggers to make them see pricing brilliance and invaluable lessons to be learned. And this latter group sits down to write up some very important pricing lessons for startups.
I pity the startup founders, anyone with a keyboard and time to walk around or go to movies seem to have something to teach startups. But I digress.
The question here is, are all those pricing instances truly illustrations of pricing brilliance?
John Balz of Nudge Blog walks by one such lemonade stand. The children running the stand list no prices. Had it been another marketing guru he would have written, “what can lemonade stands teach us about pricing” article. And this other guru indeed did write one. Since John is no such guru (remember not being labeled guru is a good thing) he does not teach us lesson but asks the simple common sense question – Why?
It turns out it is a mistake.
What appear to be an incredible pricing brilliance invariably turns out to be a simple mistake.
To quote a dialog from the Weasley twins from Harry Potter,
“That’s why it is so brilliant. Because it is so pathetically dim witted”
Even if it is indeed a pricing brilliance, it does not mean that is something you can copy without regard to the business you are in, customers you serve and the market dynamics.