Customer-oriented pricing: duel or duet?

Customer loyalty through customer-oriented pricing policy

In view of the great importance that the price has for many customers, a customer-oriented strategy is a particularly important task in customer loyalty management for retailers. Because only those who manage to see through the price awareness of their customers and then use this knowledge to design their price policy in a customer-oriented manner will in future be able to satisfy their customers in the long term and to bind them to their product and service. The good news here is that the implementation of appropriate price policy marketing measures is usually associated with only comparatively low costs and thus offers an interesting field of activity. But is it even possible to combine two opposing goals between willingness and interest? Because while the pricing policy aims to siphon off the customers’ willingness to pay as much as possible and thus generate the highest possible turnover – while the interest of the customers is to achieve the best possible purchase price. This shows that the customer-oriented pricing policy offers the potential to build customer loyalty if the price is defined from the customer’s point of view rather than from the retailer’s point of view.

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In addition to the costs for the product and its use, the customer also incurs additional expenses in the course of the procurement of goods. In brick-and-mortar retail, for example, this applies to the costs and effort involved in driving to the point of purchase, the parking fees incurred on site, obtaining price comparisons and delivery costs (preferably in e-commerce). A customer-oriented pricing policy therefore takes into account the subjective price perception of customers. In doing so, she sees the price as a marketing tool to solve problems related to the price and thereby gain corresponding preferences from the customer. Accordingly, the preferences gained can bind customers more closely to the retailer and the company.

Examples of customer-oriented pricing

• If the purchase price is based on a promised effect instead of the product, for example in systems and consulting transactions, the supplier himself assumes the customer’s usage risks and thus increases their willingness and confidence to pay.
• Some markets allow the product to be enriched with additional services and both to be marketed together. Beverage manufacturers offer a service for private and business customers in which a defined selection and number of beverage bottles can be delivered to your home or office for a fee. The manufacturers take on the entire logistics, from delivery to collection of the bottled goods. The customers’ reduced procurement costs then have positive customer loyalty effects.
• Flat-rate prices, as we know them from the telecommunications industry, for example, at which the user can purchase as many units as he wishes for a fixed amount, offer many buyers security from unpleasant price surprises. Many buyers are prepared to accept a higher price for this corresponding security. Here too, price satisfaction increases and with it customer loyalty.
• If a retailer sells several heterogeneous goods in one package at a total price, one speaks of price bundling. If the total price is usually lower than the sum of the individual prices, the bundling of prices also leads to increased price satisfaction and thus to higher customer loyalty.
• Clearly comprehensible pricing, such as that found in shopping cart configurators in e-commerce, for example, and which lets the buyer know at any time what the selected configuration costs, reduces the buyer’s fear of hidden costs and also increases price satisfaction.

Conclusion

In summary, one can say that providers with a customer-oriented pricing policy can specifically influence the price satisfaction of their customers and thus increase customer loyalty without selling below the margin. The biggest advantage compared to other measures to promote customer loyalty is that not even high investments are necessary. The most important prerequisite, however, is a profound knowledge of the price behavior of the relevant target group. Customer loyalty should therefore be the focus of your business and increase economic success, because: loyal customers buy more often, loyal customers buy more and higher quality, loyal buyers are more generous, loyal customers are immune to other providers, loyal customers act as free sellers.