Tiered pricing is a method in which a business offers its products or services in differently priced tiers, usually three. The tiers are typically advertised as follows: basic tier for lowest prices, medium tier for best value-for-money, and highest tier for premium services. Alternatively, you can structure your packages depending on quantity purchased (i.e., those who avail of your services regularly have access to discounted rates).
This sort of pricing can be put to good use in your private jet charter business, and here’s why:
- It allows you to increase your prices without much risk.
Tiered pricing can be one way to “test” increased prices by including them as tiers. Find inexpensive ways to add value to the two higher tiers, and make sure the premium appeal of the highest tier is clearly perceived. From there, track the data to find out which package is most popular and figure out why.
- It can suit a luxury service well.
Although there are now more people opting for private flights for practical reasons, there are still many who only want it for the luxury and demand the best that money can buy. In other words, a big part of your customer base will be people more than able and willing to splurge; only offering a single rate could be a missed opportunity.
- It can encourage sustained patronage.
If you offer price tiers according to quantity or frequency of purchase, you can encourage frequent fliers to stay with your company. You can sell according to flight hours, or according to the number of flights per year (or over a span of several years), giving lower rates to those who purchase more. For those who need private flights regularly, this could be a great incentive to keep doing business with you.
- You can use this to great effect in your advertising.
The availability of options is always attractive to consumers, so price tiers can certainly be something to leverage in your advertising efforts. Either create specific ads targeted to each tier, or create an all-in-one ad that presents the range of options. You can potentially reach a wider market than you would with one price.
- It creates a sense of membership.
With luxuries, as well as other products and services that people tend to associate with status, customers tend to want a sense of belonging to an exclusive class. You can make use of this to great effect if you name and market your tiers the right way.
Communicate this sense of exclusivity when advertising your highest-priced tier. If at all possible, see if you can get testimonials from your clients who are well-regarded personalities or respected businesses. This would make the customers purchasing your premium tier feel that they are in good company.