London Olympic Pricing Model for Ski Resorts?
A recent article in Harvard Business Review describes how the London Olympic Organizing Committee set about pricing tickets for the 2012 Summer Olympics. I had never heard of the concept of “shared-value”, which I understand was actually first introduced by Harvard Business review and explained in this blog post.
The central premise behind creating shared value is that the competitiveness of a company and the health of the communities around it are mutually dependent. Recognizing and capitalizing on these connections between societal and economic progress has the power to unleash the next wave of global growth and to redefine capitalism.
The London Olympic Committee created shared value by dong a lot of market research to see what Londoner’s would be willing to pay and then creating multiple tier ticket prices to enact this as they could. This was executed by being firm about not giving away free tickets and then they set “symbol” high and low price points of £20.12 and £2,012 for high demand events such as the opening and closing ceremonies.
So how could a ski resort create shared value with its customers via its pricing strategy? I’m not an expert on pricing strategy, but I do know that ski resorts don’t generate only 20% of their revenues from ticket sales (as the London Olympics anticipates). Rather they must generate a higher percent of revenues and they also don’t have as much flexibility in setting the prices. So how can ski resorts create shared value? Certainly energy conservation, using local vendors and slow food where possible are a start. There are also plenty of ways to think about reinventing how ski resorts work, in particular using new technologies like RFID access gates to allow skiers and riders to pay as they go or even put their cell phones (NFC in the new iPhone anyone?) in their pocket as they head out the door to the mountain. In terms of pricing, there could be any number of yield managed situations, perhaps along the lines of how many sports teams (SF Giants were one of the first with their Dynamic Deals) are setting ticket prices by virtue of the opponent they are playing that day.
How do you see ski resort using created shared values working ski resorts? Or do you see created shared value as something that just isn’t the right fit for ski resorts?
Photo credit: Flickr user p_a_h