Name Your Own Price – An Effective Marketing Approach in the Era of Competitive Ecommerce
Companies are increasingly adopting a Name-Your-Own-Price scheme to fight in the shade of economy crisis. Washingtonian Furniture, a Maryland based store, has made inroads into NYOP pricing and has attracted more visitors to become loyal customers.
When Simon Tao, partner of Washingtonian Furniture LLC, was in Singapore this spring, he stayed at a 5-star hotel Royal Plaza, part of French hotel group Accor. He participated in their “Name Your Own Price” program. “Take a guess how much I paid for a Deluxe King Room?” Simon asked. “60 bucks per night!” A guest could choose to pay the price they were willing to stay at the hotel. The NYOP turned out to be a brilliant gimmick to attract more visitors to the hotel in the midst of the global economy crunch.
In a time of crisis, no one wants to pay high prices.
Facing fierce competition, ecommerce business owners often ask what I tell if my customer sees my price and says in a horrifying tone: This is simply too much for me!
The situation may look different with “Name Your Own Price”. The model may be a valuable tool for creating differentiation and thus relaxing price competition.
Priceline is one of the pioneers that adopt NYOP. Its users have the option of setting a desired price. The site then tries to match a vendor that sells at that price.
Washingtonian Furniture, a Maryland based furniture factory outlet, has recently introduced a more “friendly” NYOP feature. The company offers discount modern furniture to both household consumers and business customers. Different from Priceline, it does not require payment obligation to haggle. Their NYOP is reserved mainly for business customers who look to buying furniture in bulk. All the customer needs to do is click on a “Name Your Price” button and put in your preferred price and wait for a response – deal or no deal.
The main reason why the furniture outlet has deployed this more popular pricing model for business customers is that they often drop by with a variety of needs in terms of product mix and quantity. And they may also demand customization for the furniture they are buying. So having one fixed list price on the website would in no way accommodate these varying needs. Visitors would simply walk away without giving the marketers a chance to talk about the business. Not to mention wining it.
Since launching the NYOP mode, the company has received over one hundred inquiries with a price indication. And many have become customers. Apart from boosted sales, the increased close interaction with potential customers, as a beneficial result of NYOP, has turned out to be an effective tool to help the company collect invaluable market intelligence as to what the targeted customer is really looking for.
Our common sense often tells us that negotiation is all about compromising. For seasoned marketers, NYOP is a lot more than compromising and it is even beyond pricing. Its main essence is to find common solutions that represent a win-win for both sellers and buyers, which is the philosophy of the Harvard-concept.
- Contact Information
- Emily Gu
- Washingtonian Furniture
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