The Power of Personalization
Personalization drives engagement and sales:
- 70% of American consumers expect personalized experiences from online businesses.
- 91% of consumers are more likely to shop with brands that deliver tailored offers.
- 93% of companies report higher conversion rates thanks to personalization.
Benefits of Personalized Pricing
The goal of personalized or customer-specific pricing is to enhance the overall customer experience by providing tailored pricing that aligns with individual preferences, increasing customer satisfaction and loyalty. Benefits of personalized pricing include:
Personalization
Tailor your pricing strategy to specific customers or segments, providing a personalized shopping experience.
Customer Loyalty
Enhance loyalty by making customers feel valued with personalized pricing, encouraging repeat business and retention.
Relationship Building
Personalized pricing fosters a stronger relationship with customers, as it demonstrates an understanding of their needs and preferences.
Revenue Growth
Optimize revenue and profit margins by aligning prices with perceived customer value and by encouraging them to buy more (to avail better pricing – increasing AOV).
Segmented Marketing
Facilitate targeted marketing efforts by creating promotions or discounts for specific customer segments, driving engagement and sales among those groups.
Competitive Advantage
Attract and retain customers in a competitive market by strategically adjusting prices based on customer behavior, purchasing history, or loyalty.
What is Personalized Pricing?
Personalized or customer-specific pricing refers a pricing strategy in which businesses tailor their prices for individual customers or specific customer segments based on various factors (mentioned below). This approach goes beyond traditional one-size-fits-all pricing models and aims to provide a more customized and targeted experience for each customer. Key aspects of customer-specific or personalized pricing include:
Individualization
Prices are adjusted on an individual basis, based on the analysis of customer data collected through loyalty programs, online interactions, purchase history, and more.
Segmentation
Businesses may categorize customers into segments and apply specific pricing strategies to each segment, recognizing different customer groups with distinct needs and behaviors.
Dynamic Adjustments
Prices may change dynamically based on factors such as customer interactions, purchase frequency,
volume of purchases, and responses to
promotions.
Competitive Positioning
Personalized pricing can be used as a competitive advantage, allowing businesses to offer unique and targeted incentives to retain existing customers and attract new ones.
Challenges of Personalized or Customer-Specific Pricing
Personalized or customer-specific prices are common in the B2B and offline world. Customers negotiate different prices depending on various factors like quantity, payment terms, relationship, and more. Businesses often use their ERP system to manage complex pricing rules and engagements. However, businesses struggle to offer the same flexibility and experience online because:
Implementation Complexities
Implementing a customer-specific pricing system can be technically challenging. Most eCommerce stores are not geared to handle such complex pricing scenarios.
Integration
Challenges
Offering personalized pricing requires visibility to additional customer and product data. This information resides in external systems like CRM, ERP, and others.
Price Discrimination Perception
Ensuring pricing consistency across various touchpoints is vital to avoid confusion and distrust. Transparent communication is key to avoid customer dissatisfaction.
Customer
Expectations
If not implemented properly, customer-specific pricing can lead to unrealistic customer expectations. They may always expect discounts, and failure to meet these expectations can lead to dissatisfaction.
Testing and Optimization
Determining the right pricing strategy for different customer segments requires testing and optimization. Businesses must continuously analyze data and adjust their approach to achieve the desired results.
Maintenance and Updates
Managing and updating a customer-specific pricing system requires ongoing effort. Prices may need to be adjusted based on market conditions, customer behavior, or changes in the business strategy.
Let us look at how i95Dev worked with a business to address the challenge of customer-specific pricing in the eCommerce world, while leveraging the pricing rules defined in their ERP system.
eCommerce + Customer-specific Pricing in Action
Experience seamless eCommerce with dynamic customer-specific pricing tailored to individual buyer profiles. Boost engagement and sales by offering personalized
pricing based on customer history, tier, or negotiated deals—all in real time.
About the Customer
- A 40+ year-old company with an enviable reputation in the plumbing industry, serving customers across commercial and residential sectors.
- They had a huge portfolio of products and a very complex pricing structure which they managed in their ERP system.
- They were struggling to provide the same experience online. As a result, they often found themselves doing a lot of manual work to keep the online customers happy.
Solution: Customer-specific Pricing or Omni-pricing Module
- The client’s eCommerce store could support only a basic pricing structure out-of-box.
- We leveraged our eCommerce, ERP, and integration expertise, to extend the eCommerce store and replicate the omni-pricing structure defined in the ERP system.
- We also integrated the eCommerce and ERP systems to reduce the manual overhead required to keep the two systems in sync with each other.
- This enabled the client to provide dynamic discounts to B2B and B2C customers effortlessly based on specific contracts created in the ERP system.
Explore i95Dev’s Offering
Omni-channel Retailing
Drive omni-channel sales across online marketplaces, social channels, voice-activated devices, and AI-powered chatbots leveraging your eCommerce store.
B2B/ B2C eCommerce Services
Build an effective and interactive eCommerce ecosystem for tomorrow’s growth with a customer-centric approach.
ERP Integration Products
Improve operational efficiency, manage product and inventory information better, and enable options like BOPS with seamless ERP and POS integration.
Talk to our eCommerce experts today!
Are you underutilizing your eCommerce store or postponing digital adoption because of complex pricing challenges?