Fleamarket RM II - When revenue management theory meets real life reality

My last post was about How Gen Alpha applies RM to Flea markets - The preparation stage. It covered just that - how Rafa and Hayden applied RM principles naturally in the preparation stage using technology available.

Today rubber meets the road as Revenue Strategies were put to the test when they met real life flea market reality and what the learnings were:

Conditions change, be prepared: Better to join late than to give up

All week it was predicted to rain and the event to be cancelled. We got the message night before that they will go ahead but with a 2 hrs delay. We arrived 2hrs late as requested, really raining (Hardcore Flea-marketers were there though), so we decided to go shopping and come back in 2hrs. It was drizzling.

The old ones (me and my wife) were kinda like: Lets go home. The short ones were adamant that we are going to nail it: We came here for a reason, quitting is not an option.

We got in line, got our gear and set up....and the crowds came.

Have a plan: Manage demand, keep fingers on the pulse and strategic clarity

Crickey, did they come in full force. Whilst setting up we were hit by swarms of people. No prices out, no idea what we actually had out and the kids were into it. You could argue that all our preparation was still in the bag and we were all doing our little negotiations on our own. We realised at that point that guidance is critically important:

Customer: I would like this toy, How much?

Hayden: 15

Customer: Sorry, too much.

Hayden: Ok .... 2!

It kind of became clear that default answer to a No was 2 euro. I asked Hayden what he was doing and his reply knocked me over: "I heard you and Mama saying that we should get rid of everything no matter what".

Now lets get to some of the juicy bits and what was learned:

Value add′s and packaging works

No-one wanted to buy a barbie for the price we offered. However, the moment we advertised: Buy a Barbie and you can choose one more outfit.....100% conversion on customers. Barbies gone!

Bidding in upselling works

Whilst my friends from UpsellGuru have a brand ambassador called Rob Paterson . On flea market day we had Hayden transform into master of upsell bidding. Skillfully (after default of 2 was taken out) either accepting bids or offering alternatives.

Customer: I would like this toy, How much?

Hayden: 10

Customer: Sorry, too much.

Hayden: How much would you want to give?

Customer: 5

Hayden (thinking): 5 cannot. But because its you...7.

He applied that same methodology to offering items that were related: Would you like the wolf with the soldier? How about another Playmobil France so yours has a friend? How much extra would you pay if I give you a "bitten barbie" on top?

Hayden was do good at it that one customer purchased over 15 items.

Know your product's worth and your perfect customer

This was most probably the coolest thing I experienced seeing it in real life. In hotels we have the urge at times to have everyone sleep with us whereas different customers fit perfect with us, whilst others don't. Something Rafa really got into:

Rafa

"Papa, so cool. You know that one toy? She wanted to pay 3. But I think its worth more because I loved playing with it so I said no. So then someone else came & gave me 5."

"Different people pay different amounts because they have a different value perception" was the eye opener for the kids by far. It allowed them to become creative, stand their ground and say No, but equally make an exception to make someone's day.

Segmentation feel flat on its face

Segmentation on the other hand didn't work. Not one bit. The name of the game was hyper personalisation and being present for the individual each and every time.

Storytelling and pictures to create an experience in the mind of the customer

As you know we took pictures. Cool pictures made the sale every single time. We coupled that with the kids talking about how they played with the toy, were able to directly show how you can use it and boom sale was done. This created a perception that created a reality that created a sale.

Discounting only works in context

The kids pretty quickly realised that whatever price they gave, very randomly people would agree and that most of the time they would counter offer. It was interesting to see as Rafa and Hayden were talking about their customers with each other and what worked what didnt. Two strategies emerged:

1. Increase price to start with and then negotiate to the price you want. Flaw here was that people would not even go into negotiations at times as price was perceived too high. This strategy was abandoned quickly as the kids said it was like cheating.
2. Give the features, then the reference price, then the price. I am not joking. I found my kids explaining all the "extras" that were included in the playmobile sets and that we paid "so much for it" and today is a "bargain".

Don't be afraid of selling premium products at premiums prices

We had that one toy, 250 pieces of Duplo (big Legos). Everyone asked price, no-one wanted to buy. "Too expensive". But we held our ground - no discounting on that one. And guess what, the right person came, purchased for the right reason, saw the value and was happy to pay the price we asked.

Conclusion

There you have it. Amazing time. Nearly all got sold. Kids took some valuable lessons and next year as I was told " We will do even better". And the money they made?!?! We offered them to double up if they invest 50% of what they made and spend the other 50% on anything they like.

PS: If you like to know more about RM, come and join one of my fun and informative monthly webinars or download one of our guides.