July 11th, 2008 
Vijaianand Few years back(2003), when I was living in an apartment complex owned by a property manager&companies(PMC). I was forced to renew the apartment lease every 6 months which was new to me moving from Boston. I came to know thats common in Houston area giving away a free ride to PMC to jack up the rent more frequently.
Many will agree obviously that is bad as tenants and shares my frustration. Most likely the rent will be increased 10% which PMC will be keen on instead of trying to retain the tenants. At the sametime they offered really good deals for the new tenants especially with free half month rents and cheaper rents to trap them.
When I enquired with the PMC folks asking them “what happened to old customer courtesy?”. We are your tenants already and don’t you like to give a good deal for us instead of jacking the rent compare to new guys. They would say, “NO, it won’t work like that way”. Once you are tenant, you don’t get any promotions and you are prone to increase in rent every renewal. They just don’t want bend.
There were lot of apartments near by so many tenants just took the pain of moving to different apartments every time they jack up the rent hoping to save some money in the long run. But some just stick with the same apartment not willing to take the pain of moving. This trend continous till today as I know from my friends who live in apartments. PMC people just don’t care about you these days, they just want to make money somehow.
I see same type of business strategy used in many businesses like Airlines, hotels, Events Tickets and other industries more in past years. I was wondering all about it and I am sure many of you might also thought about “why some of us has to be dirt cheap price and others end up paying Himalaya price”. I just thought its just the way of business until recently. I found the real answer for my unasked question in SmartMoney magazine. There was an article digging deep about this strategy. I just got to know the real essence of this tactics and wanted to share to you guys.
I know its getting interesting now. I have lot more information to share on this topic like “What other industries are starting to do ?, “How as consumer can try to escape or be on the otherside of the fence to take advantage of it” and much more with my realistic research in my next part. So stay tuned.
At that time, I really didn’t understand it. Usually if you are customer with any business for sometime, they tend to show you some customer courtesy and appreciate being their customer for long by offering discounts to let you stay with them. I wasn’t really thrilled that time and so just moved on bought a home to avoid all this trouble.
I see same type of business strategy used in many businesses like Airlines, hotels, Events Tickets and other industries more in past years. I was wondering all about it and I am sure many of you might also thought about “why some of us has to be dirt cheap price and others end up paying Himalaya price”. I just thought its just the way of business until recently. I found the real answer for my unasked question in SmartMoney magazine. There was an article digging deep about this strategy. I just got to know the real essence of this tactics and wanted to share to you guys.
This common business strategy which is unknown to ordinary consumers is called “Price Optimization“. There is no more long time customer courtesy anymore, its all about how much many money a consumer should pay taking into account the current market condition, geographical location, local demand and lot more parameters with complicated calculation done by the computer software.
I know its getting interesting now. I have lot more information to share on this topic like “What other industries are starting to do ?, “How as consumer can try to escape or be on the otherside of the fence to take advantage of it” and much more with my realistic research in my next part. So stay tuned.
Have a good weekend folks…
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