Impact Pricing Blog

Price Segmentation at National Parks

In a Wall Street Journal article titled “How to Save Our National Parks,” Brian Yablonski suggested charging foreigners more than citizens for entry into US National Parks. You may have strong political or emotional opinions about this. This post focuses on the pricing aspect. 

Price segmentation simply means charging more to buyers who are willing to pay more. The key tasks are to identify buyers who would pay more and establish mechanisms where different buyers pay different amounts. 

Would foreigners pay more? At first glance, possibly not. After all, the US is one of the wealthiest countries in the world. American citizens have more money. Wouldn’t they be willing to pay more? 

However, national parks wouldn’t charge higher prices to ALL foreigners, just the ones who travel to the national park. Only wealthy foreigners could afford to travel to the US, rent a car, and book hotel rooms. If you only looked at the populations of foreigners who show up at that gate of a National Park, they are probably much wealthier than the average American. 

As the article points out, around the world, it is common for locals to get better prices than foreigners at destination attractions. The identical situation even occurs within the US. Florida residents pay less to go to Disney World than non-Florida residents. The reasoning is identical. 

Price segmentation also requires a mechanism to implement the decision. This would likely include something like showing a Driver’s License or ID to get the locals price. We see this at many outlets where seniors or US military prove their status to get a discount. 

By the way, the Parks already have price segmentation. I have a Golden Eagle card (because I’m old) which costs $80 dollars and gets me into any national park for the rest of my life. Of course, I have to prove I’m a “Golden Eagle” by showing the card. 

As you consider this situation, apply it to yourself. Which of your current customers are willing to pay the most? Can you craft a mechanism to capture more from them while still charging most of your customers the lower price? 

Price segmentation is incredibly powerful and profitable. EVERY company should be doing this. If you’d like some help, let us know. It’s what we do. 

Share your comments on the LinkedIn post.

Now, go make an impact!

Tags: pricing, pricing foundations, pricing skills, pricing value, value, value-based pricing

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