Why is the new Wizz Air more than just a good deal?
Wizz Air (the Hungary based low cost airline) has just launched an “All You Can Fly” pass for only 599 EUR/year. Let’s see how this deal includes at least 3 examples of using pricing tactics to redefine value and differentiate in the market.
✈️ Dynamic Pricing vs. Value Unit Shift: While airlines are famous for dynamic pricing, Wizz Air is shaking things up by shifting the value unit from “number of flights” to “year.” Whether this is a good deal or not, it depends on each one’s habits and needs. But this shift allows Wizz Air to differentiate and appeals to a different customer mindset.
🔒 Fencing for Segmentation: The requirement to book only 3 days before the flight, with limited availability, ensures that this offer appeals to those with flexibility. This smart restriction fences off customers who would have paid full fare anyway, preserving revenue streams.
💶 Psychological Pricing: The 9 EUR fee per flight is almost negligible in the context of unlimited travel. This minor fee is a clever tactic to maintain a revenue stream while making the overall offer feel like an unbeatable deal. In reality, 9 EUR per flight is not too far from the “full fare” charged by some airlines for certain flights. So it’s all a matter of “anchoring” the customer to the right price.
💼 Bonus effect: Buzz and free marketing. While this deal is probably not that good for the largest majority of travelers, the news happily took this news giving Wizz Air a free and large marketing exposure
Whatever the evolution of this story will be, it just highlights an important fact; Pricing is much more than a tag. It’s an essential feature of your Product, and an incredible leverage for your business.
What are your thoughts? Will this offer stay? Or is just a test? Or a “marketing tactic”?
My name is Salva, I am a product exec and Senior Partner at Reasonable Product, a boutique Product Advisory Firm.
I write about product pricing, e-commerce/marketplaces, subscription models, and modern product organizations. I mainly engage and work in tech products, including SaaS, Marketplaces, and IoT (Hardware + Software).
My superpower is to move between ambiguity (as in creativity, innovation, opportunity, and ‘thinking out of the box’) and structure (as in ‘getting things done’ and getting real impact).
I am firmly convinced that you can help others only if you have lived the same challenges: I have been lucky enough to practice product leadership in companies of different sizes and with different product maturity. Doing product right is hard: I felt the pain myself and developed my methods to get to efficient product teams that produce meaningful work.