Price and customer experience are intricately bound. Thanks to digital advances and today’s more liquid sales environment, prices can—and should—be considered as fluid as any other factor that influences the customer experience.
Savvy leaders are taking notice. They are recognizing that dynamic pricing can make the connection with experience even stronger.
With pricing that accurately and fairly reflects the value of the customer’s shopping experience in all channels, smart companies are creating mutually beneficial outcomes. They are competing in new ways and using customer affinity to drive growth.
A new equation for personalized dynamic pricing
Digital has illuminated the fact that experiences are shaped by other fluid and unpredictable factors such as customers’ methods of interaction or their expectations or mindset at the point of purchase. In this more liquid sales environment, the old experience equation no longer holds.
Findings from Accenture Strategy research suggest that customers no longer expect—or even want—static pricing.
Sixty percent of consumers are willing to pay a higher price if it ensures higher levels of product options or quality.
Sixty-six percent of customers won't sacrifice quality and service for price.
Thirty-two percent of customers have higher expectations than they did a year ago.
Of course, these statistics don't mean that customers will embrace any form of dynamic pricing. Dynamic pricing must be applied strategically. Companies need to ensure that what they offer in one channel is supported or extended in another—and priced accordingly.
The static price factor.
In recent years, companies have invested significantly to deliver a better customer experience (CX) than their competitors. But most have overlooked the one factor that influences CX the most: price.
To build dynamic pricing into their customer experiences, companies should:
Recognize that price is a reflection of the experience. As the experience changes, so must the price.
Consider all factors that influence the buying experience, segment customers more precisely, and create product and pricing offers that best meet their needs.
Harmonize price with the experience that is delivered.
Establish strong pricing governance structures, and match workforce talent with the experience that is delivered.
Make sure feedback mechanisms are in place to enable fast and accurate price changes.
Break down barriers that often stymy the delivery of high-quality CX.
Thomas G. Jacobson is the global managing director of Accenture Strategy’s Pricing and Commercial strategy practice area. He partners with C-suite clients to architect and lead major business transformation engagements, across industries, with a functional expertise in pricing, sales excellence and customer and market analytics. Tom is recognized globally for his thought leadership. He is the co-author or key contributor in several books, Selling Through Someone Else (2013), The Oxford Handbook of Pricing (2012), and Contextual Pricing (2011).
Tiffany is a Managing Director in Accenture’s Strategy group and part of the Advanced Customer Strategy practice. She specializes in Pricing and Commercial Strategy, specifically discount optimization and price negotiations. Tiffany has helped numerous global companies in a wide variety of industries transform their business strategy, processes, organization and technology to maximize profitable growth. She is the co-author of a chapter in the Oxford Handbook of Pricing and Selling Through Someone Else. Prior to joining Accenture, she held various general counsel and corporate counsel positions within the financial services, software, and manufacturing industries.
Tiago works primarily with executives in the Consumer Goods and Industrial Products sectors to transform their pricing and commercial strategies. In addition to his focus on pricing transformation, he specializes in developing strategies for sales and marketing, customer segmentation and product development, and designing new pricing operating models. Tiago is based in Chicago.