Wednesday, September 4, 2013

Flat Rates Take the Guesswork Out of Pricing

From taxi rides to long distance phone service, a shift towards flat-rate pricing models is becoming more noticeable these days as vendors focus on the value of their services. A growing number of consumer service providers are adopting a flat rate pricing structure because of its ability to attract customers.

More and more budget-conscious consumers are choosing flat rates because they prefer to know up front how much they will pay. This is useful in promotional communications when service providers want to emphasize the value proposition they’re offering for the price. You've probably seen the U.S. Post Office’s “if it fits, it ships” commercials that promote their flat rate priority mail. In other words, if it’s possible for you to stuff a refrigerator inside one of their flat rate boxes, they promise to ship it at the set price.

The shift in pricing trends is evident in Birmingham, Alabama, where taxicabs are offering taxi services at a set rate, quoted to customers prior to the ride. But not all cab drivers are embracing fixed pricing schemes. By contrast, the taxi drivers in Charleston, SC, don’t like the city’s mandated $5 flat rate for all downtown fares. The Post and Courier reports that cab drivers say the flat fares cover expenses, but leave little room for profit.

More than half of consumers prefer to pay a flat fee for financial planning services, according to a new survey recently issued by the Life Insurance Marketing and Research Association (LIMRA). The report reveals that 55 percent of consumers favor paying an advisor a flat fee to develop and implement a plan for retirement income.

Flat-rate pricing has already made inroads into long distance and wireless telephone service. Business Network Long Distance keeps its rates the same in order take the guess work out of long distance service for its residential customers. What makes flat rates even more compelling to Business Network Long Distance customers is how simple it is to figure out their phone bill.

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