Pricenow already supported the Weisse Arena Group in the area of data analytics in the last winter season 2020/21: With Pricenow's Business Intelligence Tool, the Weisse Arena Group was able to set a ticket quota due to COVID-19 and thus offer an improved and secure customer experience despite the pandemic. Markus Wolf, CEO of the Weisse Arena Group, was very satisfied and had already promised further cooperation back then.
From data aware to data driven
The Weisse Arena Group is considered one of the most innovative companies in alpine tourism and a first mover in the area of digitization. The Weisse Arena Group knows its customers and uses digital solutions to generate valuable data. In addition to the mountain railway, LAAX customers in particular benefit from this, who are offered tailor-made offers at the right time and at the right price.
Starting this season, Pricenow, which uses the extensive data and is now also accompanying the Weisse Arena Group on its journey towards a “Data Driven Company” in the area of pricing. “Data-driven” means that the most important decisions are made as data-based as possible. This is particularly essential in the area of pricing, as multidimensional data must be processed at the same time for optimal pricing. Here, the computer is simply superior to humans.
“It was clear to us that we also wanted to use the existing data in price optimization, as it could create real added value for customers and our company here. With Pricenow, we have found a provider who can create the hoped-for added value from data.” Markus Wolf, CEO Weisse Arena Group
Starting this winter season, the prices of the Weisse Arena Group will be set purely based on data. This means that prices are adaptively adjusted to the market environment: Consumer behavior is predicted and prices are set accordingly even before the consumer reacts. This results in automated, reliable and precise price optimization, which enables the Weisse Arena Group's corporate goals to be achieved in the long term.
Make or buy — which is better and more sustainable?
Dynamic pricing is basically nothing new for the Weisse Arena Group: For several years now, the Weisse Arena Group has been making rule-based dynamic pricing of prices in the web shop and app internally, and early bookers have been able to benefit from this. As a result, the question now is why does the Weisse Arena Group rely on Pricenow's pricing engine?
Markus Wolf, CEO Weisse Arena Group: “Pricenow didn't have to convince us of dynamic prices, as we have been convinced of this concept for a long time. Instead, Pricenow's algorithm showed us a state-of-the art pricing approach that simply convinced us - especially because the specific conditions of the industry are fully taken into account. It quickly became clear to us that dynamic pricing is not the same as dynamic pricing. As a result, we had to ask ourselves the question, can and do we want to develop this internally, or is it better not to rely on a specialist who is fully focused on it — the answer is known.”
The make or buy decision is an essential question, especially in the software sector, which must be answered again and again. It can be said that in-house development is only worthwhile in very few cases, as the benefits of the flexibility gained generally do not justify the resulting costs. It is also worth checking whether an internal solution achieves the same quality as a market solution developed by a company that focuses on this. Stripe's slogan has a lot of truth when they say: “We built payments so you don't have to.”
Dynamic pricing also for parking
The fact that dynamic pricing makes sense in many business areas is also impressively demonstrated by the example of the Weisse Arena Group. In addition to ski tickets, Blueline upgrade tickets, the company has decided to price the VIP parking spaces in Flims Laax Falera dynamically and depending on the probability of a sale. This was also a new and exciting challenge for Pricenow.
“Although we don't want to get bogged down and stay focused, we are constantly exploring new areas of application for our algorithms. Parking is another business area that can benefit optimally from dynamic pricing.” Reto Trachsel, CEO Pricenow
Basically, it can be said that dynamic pricing always makes sense when the following factors come together:
- Poor or no storability of the product or service
- High fixed costs
- Low marginal costs
- Distinct demand fluctuations, which can be predicted with sufficient quality, depending on various factors (e.g. weather, weekdays, seasonality, price, etc.)
- Heterogeneous customer segments (price-sensitive compared with non-price-sensitive customers)
- No infinite capacity
In addition to ski tickets, these factors also apply to parking, which is why it makes sense to dynamize prices here too. In addition to an increase in income, dynamic prices also result in a risk reduction (through early bookings), which is particularly advantageous for companies that are exposed to severe weather risks.
Reto Trachsel, CEO Pricenow: “We are extremely pleased that, with the Weisse Arena Group, we were able to convince a leader in digitalization of our products. This is almost equivalent to a knighthood.”
Industry leaders rely on Pricenow
The Weisse Arena Group is thus joining a number of well-known customers such as Engadin St. Moritz Mountains AG, Téléverbier SA, Bergbahnen Engelberg - Trübsee - Titlis AG, La Clusaz SATELC and other major mountain railways, which are making the switch to dynamic prices with market leader Pricenow. More than 50% of Switzerland's largest mountain railways now rely on Pricenow for data analytics and pricing.
Many other mountain railways and products will follow this season. Stay tuned.
Image rights ©Flims Laax Falera/Philipp Ruggli/Nicholas Iliano
