George Kakaletris’ Post

Have you thought about your pricing model lately? Does your pricing model help to optimize throughput and balance people, systems, and inventory? Check out Wendy's "surge pricing" concept that they are exploring. What have been you considering? #BusinessModels #StrategicPricing #BusinessInnovation

#Wendy’s, the fast food company, announced it will try “surge pricing” next year after restaurants install high tech menu boards. The idea is to charge more for burgers during busy lunch and dinner times and less during slow periods. Dynamic or #surge #pricing works for Uber/Lyft and Major League Baseball, but I expect this experiment by Wendy’s to fail for 3 reasons. First, Coca Cola tried this about a decade ago. It installed temperature sensors in some Atlanta vending machines. When the temperature went up so did the price of Coke. The result was a public relations disaster. Second, even if Wendy’s doesn’t have a public relations fiasco, surge pricing works when consumers don’t have choices. Wendy’s are typically located near other fast food options like #mcdonalds. If Wendy’s prices soar during meal time, people will go across the street or across the food court to the competition. Last, one key marketing messages by the fast food industry is that they provide “value.” That is why so many fast food chains have “value meals” and “dollar menus.” Surge pricing destroys the fiction that fast food is low cost. What should Wendy’s do since it is not as profitable as McDonalds and is desperate to boost both revenue and profits? Drop the idea of “surge pricing” which means prices jump during peak times. Instead, adopt “shrinking prices.” Shrinking prices is whenever no one is at Wendy’s prices are slashed to just above marginal cost. The social media impact of people filming themselves walking into an empty Wendy’s and getting giant burgers for a low cost is a very effective advertising campaign. For those who like video, I talk about Wendy’s surge pricing on #WBZ TV news here. https://lnkd.in/eRjvAUw2

We're entering new stadia of corporate greed. Dynamic pricing has nothing to do with 'customer service', although that's always the narrative sold to us by these companies. It all has to do with increased profits. We'll be seeing more of this. In the end we'll be wasting precious time on figuring out when to buy things at an affordable price. Since that's basically a battle against the algorithm, we're bound to loose and give up. That's exactly what these companies are betting on. Thinking of starting to implement 'dynamic payment', based on propriety variables.

What went wrong in announcing Wendy's variable pricing scheme? Simply put, messaging during any public forum needs to be managed. The audience was not exclusively investors but also customers thrive the media. In the end, the message and the product did not match the customers' needs. Their reaction indicates that they want dependable value and convenience. They have no interest in making profit management easy for the supplier. Variable pricing could have been more attractive by offering discounts and value packages during quiet times... the same way bars offer happy hours. Good idea... poor messaging... https://lnkd.in/eSEbjYY8

The Wendy's Company is saying they are not going to jack up prices when it's super busy, despite talk about trying out "dynamic pricing". According to them, they are all about giving discounts when things are slow. 🍟🍔 Here's the thing - people aren't buying it. There's a big uproar about fairness and whether this is just a sneaky way to squeeze more cash out of customers. It's got everyone talking about what is right vs. wrong in business... especially when tech is making things complicated. Plus - dynamic pricing or not - how could you say no to a Baconator and a frosty during peak hours? 💔

What are the best ways to establish real ROI? How do you measure the impact of the work that you and your teams do every day? Knowing what to measure and how to measure it is ultimately what enables you to improve operations and drive significant returns back into the business. Learn how to measure success: https://lnkd.in/epGG6WkW

My husband flagged this story to me because he knows I love words. What was referred to in an investor call as 'dynamic pricing' was interpreted and jumped on by multiple news sources as 'surge pricing' similar to Uber who increase their prices when times get busy. What Wendy's actually meant was pricing that facilitates discounts when it's quieter... which is a good thing right? And yet the Wendy's media team is now presumably in a tailspin trying to correct the misunderstanding which actually could have had a positive reputational bump for the brand. The learning.. when it comes to good communications there is nothing that beats clarity, simplicity and saying what you really mean in simple, human terms. If dynamic pricing means more discounts for more people, just say that. #communications #mediarelations #pr

Language is key and can help or hurt without proper context. This doesn’t just apply to marketing but in day-to-day projects. As the article concludes: “Words are powerful. The vocabulary you choose to describe your business and its plans can have a huge emotional effect on your customers, and that can lead them to love or hate your brand.”

Pricing communication matters. Like many of you, I've been reading all sorts of articles about Wendy's announcement on trying out dynamic pricing. To put it mildly, the coverage has NOT been positive. But, when I went back and looked at the wording from the news release, it was pretty innocuous. Why did Wendy's use of the term 'dynamic pricing' generate such a strong negative response? Think prospect theory! Danny Klein and Ben Coley, thanks for the opportunity to write this. Would love to hear all of your thoughts on this!! #dynamicpricing #qsr #revenuemanagement #pricingstrategy #revenuemanagement #hsmai

Consumer-focused companies are telling us that they’re now more focused on fighting for traffic, volume, and market share than raising prices as a growth strategy: https://t.co/rm9oVXRlaS