Nice try, Wendy’s. In a recent earnings call, President and CEO Kirk Tanner announced the company’s plan to experiment with new pricing strategies, such as dynamic pricing, day-part offerings, AI-enabled menu changes, and suggestive selling, starting as early as 2025. While analysts on the call did not question the statement, the public response was swift and negative, with Wendy’s facing backlash on social media platforms. Within a couple of weeks, Wendy’s clarified that they had no intention of implementing surge pricing, which raises prices when demand is high. The company emphasized that they do not plan to raise prices when customers are visiting the most.
The distinction between dynamic pricing and surge pricing is important to note. Dynamic pricing involves fluctuating prices, while surge pricing specifically refers to price hikes. Many industries utilize dynamic pricing, such as ride-sharing services like Uber, while airlines use dynamic pricing based on various factors. The Wall Street Journal reported that many restaurants, including Dave & Buster’s, employ dynamic pricing strategies to adjust prices based on demand.
While dynamic pricing offers potential revenue benefits, there are also risks, as Wendy’s learned from the public backlash. Negative customer perception and trust can be a significant concern with dynamic pricing if customers view prices as unfair or unpredictable. However, research indicates that a majority of adults support variable pricing based on business needs in the restaurant industry.
The trend of dynamic pricing may extend to healthcare in the future, with private equity firms investing heavily in healthcare practices, potentially leading to increased prices. While dynamic pricing is already present in healthcare to some extent, the use of AI for menu changes and suggestive selling raises ethical concerns, particularly regarding upcoding and maximizing profits over patient care. It is essential for healthcare providers to consider dynamic pricing strategies to remain competitive in today’s market.
In conclusion, while dynamic pricing may become more prevalent in various industries, including healthcare, it is crucial to prioritize ethical considerations and patient care over profit maximization. As the healthcare landscape evolves, AI-enabled tools should be used judiciously to ensure that pricing strategies are fair and transparent for all stakeholders.
