If you are a believer in Value Based Pricing, you know we get paid based on how much value we offer our customers. However, are you generating more value than you capture? Can you capture more of it?
During my keynotes I love to tell the story of Disneyland. 511 acres of attraction in Anaheim California that people fly in from all over the world to see. What grew up around Disneyland? Anaheim. Tons of hotels and restaurants catering to the tourists. All of these business are capturing value that Disney created.
So, when Disney built DisneyWorld, they built it on 25,000 acres. Disney owns 26 hotels and many many more restaurants. When tourists travel to Orlando Florida, Disney captures more of their total spend. In other words, Disney capture more of the value they create.
Two incidents reminded me of this while traveling. Note the pictures. One is from a restaurant where I had breakfast. They sold advertising on their tables, a 3 year license which varied from $75 to $200, depending on size. Think about that. They created value, potential customers attention, and captured some of that by selling advertising. It’s not their normal business of selling food, but they captured more of the value the created.
Then I looked at the keys on my rental car. Notice there is a Macy’s discount card attached to these keys. Wow. Avis, a rental car company, found a way to make incremental revenue by selling the attention of travelers to Macy’s.
Two questions for you: What additional value do you create? How do you get paid for it?
Bonus question – Can you think of other examples of companies that get paid for something other than their main business?
Mark Stiving, Ph.D. – Pricing Expert, Speaker, Author