Monday, March 19, 2012

Successful Flex Pricing

Every major city has problems with parking. Whenever you cram so many people with so many cars into a finite space, there will inevitably be a space problem.

However, San Francisco is fighting back through the power of utility pricing. In an ambitious experiment, the parking meters in San Francisco will increase the price of parking based on supply and demand. As the available parking spaces fill up, the price at all the other meters on the most crowded street will go up. On the flip side, streets with fewer parked cars will have the parking rates decline. Under this experiment, parking on some streets has risen as high as $6.00 per hour!

The experiment has been largely successful. There are more available parking spaces in high traffic areas and there are fewer complaining motorists.

Utility pricing will become a fixture pricing strategy as we continue to merge information technology with everyday items. From groceries linking price to freshness to smart vending machines, the network economy will use information to add consumer value. Suddenly all those "dumb" machines become adaptive, dynamic participants.

How will utility pricing and the network economy impact your business? Are you ready for utility pricing models? If not, let us help you ride the wave of the 21st Century. (305) 423-9574

R-Squared Computing | Lou RG | Nearly Free IT | Firm Wisdom

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