Digital Consumers Demand Personalized Pricing | The Financial Brand

Consumers expect today’s digital pricing models to adjust to real-time market conditions. Dynamic pricing should provide the right price, to the right consumer, at the right time. It should be contextual in nature, leveraging consumer demand and even location. Lastly, dynamic pricing should be integrated across channels.

The benefits of a dynamic pricing strategy mentioned by Crealytics include:

  • Immediacy: Using real-time data allows an organization to improve the balance between conversion projections and margins. Using digital channels, the impact of different pricing models can be measured immediately, allowing for adjustment.
  • Competitiveness: Old-time bankers like myself remember doing price shopping of competitive banks and credit unions to be reviewed by the asset/liability committee. While the shopping of local rates and prices has definitely moved beyond shops done by phone, advanced analytics can now be applied to make the needed changes in pricing immediately in response to changes by competitors. This is exactly what Amazon does 2.5 million times every day.
  • Improved Cross-Sell and Conversion Rates: Increased customer and member insight can help financial organizations understand how someone has responded in the past, allowing for ‘loss leader’ pricing that will yield broader relationship ‘wins.’
  • Pricing Flexibility: Does your organization want increased margins, better overall revenues or a maximized number of new customers? Dynamic pricing, combined with digital delivery, provides the flexibility to price each household accordingly.
  • Improved Understanding of Trends: Do market conditions result in more consumers visiting specific website locations? Dynamic pricing allows an organization to aggressively price specific services based on localized market trends.

The ability to price based on an overall relationship (including personal, small business, wealth management, lending, and commercial accounts, etc.), is logical to today’s digital consumer. Organizations can build a strategy so that valuable customers and members never say, “I have very large relationships with your bank/credit union. Why should I get the same price/rate as everyone else?”

The key to dynamic pricing, however, is the ability to open an account immediately … on digital channels. As the name implies, dynamic pricing is a ‘point-in-time’ pricing, with the benefits negated if a consumer can’t open an account immediately, using the channel of choice.

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Digital Consumers Demand Personalized Pricing.