Not so long ago, I saw a presentation about the dynamic pricing system of Tuifly.com. Very interesting. Then I thought about my job and whether we were able to do any dynamic pricing as well. I started joking around and told one of our client managers that he should offer his clients the following model as a last page of the pitch material:
Of course, this model is not feasible (how to define the precision of a requirement?), but what is true in my opinion is the fact that the costs increase as indicated. It is very hard to achieve the upper left outcome – also often due to incompetencies of the agency.
But our client manager said that we do offer special deals: “If you buy 30 man days you’ll get them for X”. We continued thinking: wouldn’t a stock price for man days be a cool thing? The more projects ask for manpower the higher the prices of man days. Actually, man days do vary in price since they are subject to supply and demand. But what I’m talking about is day-to-day changes – not yearly cycles.
This concept is intruiging but it would inevitably lead to the fact that each department would try to over-book people in order to have the highest possible prices, and thus, be most profitable.