When it comes to being a woman, the struggle is real. There's the gender pay gap. There's the gross underrepresentation of women in executive positions, and on conference stages. Data revealed that women founders only received two percent of venture capital funding in 2017.
And now, according to a pricing study conducted by the New York City Department of Consumer Affairs, in every industry evaluated, women are more likely to pay an increased cost for their products and services.
The practice of charging more for products targeted at women is called "the pink tax." The study found that 42 percent of the time, women pay more for similar products such as razors, toys, and dry cleaning. A deeper dive into the research shows that woman are charged 48 percent more for shampoo even though the ingredients are similar.
In 2004, the State of California did a study on gender-based pricing and found that annually, women paid $1,351 more than men for the same products and services. When adjusting for inflation, Vox calculates that over the course of a lifetime, the pink tax costs women $100,000.
Thankfully, as awareness of this troublesome practice increases, more companies are actively rejecting marking up products designed for women.
Harry's has designed men's shaving products for men since 2013. In response to a growing number of requests, the company recently launched Flamingo, a brand of shaving products for women. The new brand made a point to not to follow the "pink tax" trend. Razors for both Flamingo, and Harry's start at nine dollars.
Governments around the world beginning to follow suit as well. The Mayor of Washington DC announced there would no longer be a sales tax charged on feminine hygiene products because they are a necessity for women. Previously, they were classified as luxury items.
Pricing strategies should support inclusivity
At times, there are reasons where different pricing for certain segments of customers makes sense.
When I visited the famed Taj Mahal a few years ago, foreigners were charged a higher price for entry than locals were, to make it affordable for them to see a landmark in their home country.
When I go to a restaurant and order a hamburger on a gluten-free bun, I'm charged an extra fee for a "specialty" item to accommodate my dietary needs. My parents get a senior discount at certain establishments because businesses understand seniors tend to be on a fixed income.
These demographic-based pricing policies are the kind that many consumers can wrap their minds around and go along with. Thus if you need to charge one segment more than the other, be transparent about it.
Business is about belonging.
And to make your customers feel like they belong with you, they need to know that you support them in being who they are 100 percent, rather than punishing them for it.
Your customers, especially the ones who have historically been underserved like women and minorities, need to know that you get them. Your communications, products, services, and the experiences you deliver along every aspect of your customer journey should demonstrate the deep degree of intimacy you have with them and their plight.
Any pricing strategy, such as the pink tax that adds an undue burden for no explainable reason will make your customers feel abused and exploited, rather than welcome. For women, in particular, that feeling gets magnified as you consider all the other challenges women already have with achieving parity in their careers and finances.
As you work to win more customers, and particularly women, make sure you put pricing policies in place that supports inclusion and equality, rather than adding to the divide that's been far too big, for far too long.