Keeping prices sharp

Keeping prices sharp

Frontier reviewed the pricing strategy to determine the truth about price and loyalty, shutting down needless internal debate and developing “early warning indicators” to show when pricing might need to change.

The Challenge

A leading low-cost airline engaged Frontier because it was worried that its European pricing strategy might be out of date.

We had to find out first whether this was true; second whether this made the airline vulnerable to competitors; and third, what they could do about it if the answers to the first two question was yes.

The solution

Frontier reviewed the pricing algorithms and set out the objectives and constraints of the strategy as a set of clear statements that the management team could agree on. 

We then analysed data on the many millions of seats sold every year to see whether there was evidence of changes in customer behaviour in terms of price responsiveness and loyalty among frequent flyers.

The outcome

By providing clarity on what the existing strategy did and didn’t know we helped the business shut down some internal debates and sharpened the focus on where the strategy could be improved. 

The behavioural analysis helped the business to develop a set of “early warning indicators” that could be used to monitor the pricing strategy. If at any point the strategy needs to change, the signs will be there