Retailers know dynamic pricing is a great way to maximize revenue at the individual transaction level – but how do you keep customers happy, knowing someone else could have got a better price?
Over on the Intelligently blog, there’s a great rundown on dynamic pricing strategies and tips to help avoid the backlash – and shouts of price discrimination – from media and shoppers. They talk about four core aspects for dynamic pricing:
- Price Differentiation – Two prices are better than one
- Ensure you’re using a proper value metric
- Utilize Time in an auction type model
- Couponing and Discounts
While these can be effective strategies, what is missing from the mix is Incented Dynamic Pricing – engaging your shoppers on personal value, and creating a environment where those who pay more, get more. It’s establishing a value direct to give shoppers a reason to tell retailers what they are, personally, willing to pay for a product, using product discovery to dynamically bundle an item, based on willingness-to-pay. When you can engage with a shopper on price at this personal level, you lose the negative impact dynamic pricing might otherwise have – it’s completely unbiased, and a killer component to a loyalty program.
Do your organization use dynamic pricing? Have you heard of incented dynamic pricing?
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