Marketers should reconsider pricing and think behaviourally
Posted by Rod Street in Customer experience, Marketing on Mon, 22/06/2009 - 06:00
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- Prices are the key marketing variable in a tight economy
- A more customer-centric approach allows price to fulfil its economic role
- Behavioural pricing aligns the interests of supplier and customers
- Large companies have already adopted this model
- The keys to success
Price structures are often taken for granted, especially in many B2B companies. I remember working with one firm a few years ago where, when they raised their wholesale price by 6%, their realised prices might go up by 2-3% but they could not be sure in advance by how much prices would actually rise!
This is not seen as unusual by many companies. Yet, this lack of precision often means that businesses price essentially in line with their input price inflation - i.e. cost plus – rather than with a real focus on how price shapes customer behaviour. This can happen even when companies go through a sophisticated annual planning process.
The chief customer officer needs to change this approach by reconsidering price structure. Just as marketers are readily embracing behavioural targeting in their digital channels to improve profitability and the customer experience, leading companies are revisiting their price structures with similar behavioural principles in mind.
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