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Taking a Gamble...On Price
By: Janet Kalandranis
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What if there was a product that allowed you an option of price? Pay a slightly higher price now to secure a specific rate or roll the dice and pay later for what might be a better deal. Seems impossible and also interesting at the same time. What if there was a way to give consumers more options and more control over how they pay and what price option most appeals to them? Does this make the product more appealing? Does it increase purchase frequency? More importantly, does it make a brand stand out in an industry that consumers love to dislike?

Allegiant Air is taking an approach from companies like FedEx and UPS. These brands don’t worry about fuel costs and push this onto the customer by assessing market prices and adding this into the price of delivery. Allegiant is taking this idea and giving customers an option. Purchase now at a specified price that is a little higher to ensure customers know what the cost of a flight totals or take a gamble and see if you luck out in the end. This second option allows customers to pay a lower price but also sticks them with a gamble. If fuel prices go up, customers are expected to pay the difference; if they go down customers can expect a refund. Definitely a new strategy for the airline industry and one that won’t work across the board.

Luckily, Allegiant is in a bit of a sweet spot to be able to try something this dramatic. Because it is a smaller airline, the brand knows it can handle the impact of testing this type of program. In addition, most of its travelers are looking for lower-cost fares and last-minute recreational travel so the strategy makes sense. Allegiant isn’t expecting any business travelers to hop on board and take a gamble, but that’s okay with the brand. It’s simply looking to deliver what customers want. In an ever-changing world, this provides flexibility without a ton of risk.

Most travelers are going to choose the higher-priced flight — it’s safe, it’s known, and it’s probably the default. But Allegiant is hoping to make some waves in the airline industry and offer something different to customers that want to get that bargain, or at least gamble and see if they win.

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About the Author
Janet Kalandranis is here to give you all the little brand thoughts that run through her head with a little dash of spice. Find her online here.
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