Many companies are frantically adding new channels, hoping at least some will bring value to the customer. While this can sometimes yield beneficial results, we don’t believe it’s the most effective approach you can take.
As in everything we do here at Behavioural Response, we like to get a broader overview of a company’s fundamentals, test every piece of new deployments, and then leverage customer data to build a sustainable and customer-pleasing way forward. In this post, we will show you how we do that in regards to omnichannel pricing strategies.
What does omnichannel pricing mean?
Omnichannel pricing can have various forms. Organisations need to identify the pricing structure according to their circumstances to ensure bottom-line improvements.
Some companies may want to keep the same product pricing across every channel, while others may want to deploy a dynamic pricing scheme that better fits their operational model.
Each company will have to outweigh the pros and cons of these diverse approaches according to their internal circumstances, because like most things in marketing – one size doesn’t fit all. The trick lies in adequately identifying which method can serve the customer experience to its maximum while keeping your offering differentiated from your competition.
Three omnichannel pricing strategies to explore
In essence, there are three different routes to take on your omnichannel pricing strategy: same price across channels, individual prices on different channels, and a hybrid plan which is the combination of the first two.
Same prices across every channel
This type of pricing strategy entails having the same pricing structure regardless of the channel choice.
Pros: Helps build customer trust, which leads to better customer experience and increases customer retention and loyalty. Additionally, this approach ensures more straightforward inventory management.
Cons: Requires ongoing optimisation due to competition, seasonal changes, and geographic location.
Different prices on every channel
Showing different prices on various interaction channels means that the customer can benefit from a flash promotional offering, such as a social media sale that will not apply to the website or in-store pricing.
Pros: Higher profit margins on specific channels.
Cons: If the customer journey is non-linear, your customers can notice different pricing and feel ‘deceived’, resulting in sales loss and negative brand mentions.
This approach combines the elements of the first two approaches; channel-specific pricing and unified pricing regardless of the channel choice. An example of this approach includes retailers like Starbucks, which offer the same pricing across different venues and channels. Yet, they can give specific prices for a chosen loyalty program, such as in-app purchases.
Pros: Helps gain traction to a specific channel to benefit the overall company omnichannel strategy.
Cons: Requires detail-oriented investments and higher technical and marketing capacity to execute.
The omnichannel pricing strategy influences
Organisational maturity level
Every organisation needs to take an honest look into its current internal climate, from technology to employees to processes. Determining where your strengths and weaknesses are will help build a tailored execution plan of omnichannel pricing. Additionally, every organisation has its embedded processes that have worked so far. But, can these methods endure the future omnichannel requirements? Is your workforce aligned and agile enough to pivot their efforts when analytics start rolling in?
There are a few economic channel factors that play into determining the pricing of the product. For instance, digital-focused brands need to take into account the product shipping costs.
Channels that fit the customer experience
There is no point in investing in channels that do not affect the customer experience. To ensure you move in the right direction, take some time to analyse the consumer behaviour across channels and invest your marketing dollars in what delivers results in the long run.
What are your customers demanding? How are they behaving? Are you listening to the emerging trends? To satisfy your customers, you must first understand their sentiment regarding your product delivery.
Ensure that the experience you are providing adds genuine value to the customer, and let that value be your direction to providing omnichannel excellence. Once you have aligned to consumer demands, fitting your pricing strategy will come easy.
The geographic scope of your product delivery
Before determining the right approach to your omnichannel pricing strategy, you should consider the product’s target markets. Are you delivering your products across different geographies? The pricing of some consumer goods changes according to seasonal influences, therefore, your channel pricing strategy should also become more dynamic to match those changes.
Technology is the facilitator that will help you execute your chosen omnichannel pricing strategy. For dynamic product pricing, you may want to review your data management practices. Do you have a holistic overview of your customer segments? Is there room for improvement to better optimise your data utilisation, such as deploying a Customer Data Platform (CDP) or AI-fueled analytics? Right technology tools will play a crucial role in your omnichannel success, so make sure the underpinning technology can match the level of sophistication you want to achieve in your pricing strategy.
Tailoring the omnichannel pricing strategy according to your current state will help ease the way into the omnichannel-focused future.
However, taking the time to strategically choose and plan the execution of your omnichannel pricing model is what’s called for now. If you need additional insight or are curious how we can help you strategise your omnichannel pricing deployment, get in touch with our team today.
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