Having recently flown with a budget airline it made me realise that product pricing is an interesting subject. My study of economics before I graduated was limited to stuff like price elasticity and oligopolies and, even though the whole thing was a-grade yawn material and the thought of becoming an economist a fate worse than tofu, pricing still intrigues me to this day. How can things that are, to all intents and purposes, identical, be priced so differently?
About a week ago I flew to Singapore with Jetstar for $99 (we’re all about doing things on the cheap here, after all we’re the home of New Zealand’s cheapest website!). With taxes it was about $125 all up. It was a promo fare, but even their normal fare is only around $400 plus taxes. On the same journey, from Auckland to Singapore, I could have flown with Emirates and paid around $1000. So how did it go? Did they make me pedal my way to Singapore? Did they take three times as long? Did they make me sit on nails? Did they squash us in three to a seat? Did they drop us in the South China Sea and make us paddle the rest of the way? None of the above. The flight was relatively pleasant, the leather seats mildly comfortable and the flight time identical to Emirates. Sure the service of the Jetstar cabin crew and ground staff was rubbish but I could live with that. They charge $10 for a soggy cold meat wrap and $20 if you want to watch a movie but these unpleasantries can be avoided by bringing your laptop and own snack bag (water is free, phew!).
You would think for something that is almost a thousand dollars difference, the experience would be significantly different, right? Apparently not. Sure they’re not identical – if they were they would charge exactly the same price. But Jetstar, for all their failings, have obviously structured their whole business to be able to offer cheaper flights. It might be trimming internal fat, removing unnecessary jobs, forcing customer interaction electronically rather than over the phone or charging $10 for a cold meat wrap to a cornered market – whatever it is, it means the end product that the customer gets is essentially the same but has cost the airline a lot less to “manufacture”, and that’s they key to a budget airline. Another recent example of this was paying $500 for a flight to Paris with AirAsia X, over a thousand dollars less than the cheapest rival!
So what’s my point with spotting similarities between a cheap website and a cheap flight?
When you’re a business looking to buy a website you quickly start to realise there is a huge variation in the price you can pay. It’s enough to make your head spin. Slick-talking sales people dazzle you with colourful pie charts and talk of positive ROI and ecommerce and then slip you an invoice for $5,000 (an average price for an ecommerce website). But just like cheap flights, if you shop around you can find something a lot cheaper and still arrive at the same destination, if you catch my drift.
For example, at PogoStick you’ll still get a fully-functional website, with hosting, domain registration, email services (with webmail and other cloud features), customised design, personal service for a lot less. Like a budget airline there may be a few things you might have to forgo, such as an 0800 number or 24/7 availability but we understand that for many budget-conscious business owners, they can happily do without that for the opportunity to save literally thousands on their new website.
So sit back, relax, fold your tray table away and make sure your seat is in the upright position – we are ready to take off to a new website for a lot less than the chimps who chose to fly a different airline!