Modern-day customers exert a powerful hold on eCommerce players. Yet, as businesses increasingly digitize their sales operations, they are finding workarounds to retain control of their prices—even as customers actively coalesce around pricing transparency with tenacity.
A growing number of digital markets are now particularly attuned to personalizing pricing for individual clients. From the customer’s side of the counter, this type of pricing fluctuations can be deemed discriminatory as other buyers may always get better deals when they shop online—and for the same product or service.
The digital native consumer prizes vendors who are upfront about their preferred pricing models. Somewhere along the way, however, the buyer-seller relationship may be blighted by the tantalizing possibility of price discrimination; that is, of course, if the merchants refuse to disclose how they go about customizing the pricing for a given product or service.
A response from webstore owners should be underway, preferably before the lack of pricing transparency sows distrust in their company’s actions.
Selling in a Digital World: A Distant Vision or an Immediate Reality?
Digitalization is poised to furnish a dynamic selling environment.
The seller’s ability to influence buying decisions intensifies very fast in the digital world—and, as purchasing decisions will be precisely shaped by digitalization, experts encourage that “obstacles must be removed and implementation initiated without delay.”
As manufacturers edge closer to digital selling, they are making well-informed decisions and algorithm-based predictions to accurately—and above all, swiftly—drive business prowess. Harmonized by a set of clear parameters for investment decisions, webstore owners eagerly re-tool their selling systems to optimize operational efficiency and foment profitable customer relationships.
It is worth noting that, in the pursuit of digitalization, professionals are aiming to gain 24/7 access to all sales-related information, in which case they would benefit from greater transparency of their sales pipeline.
All the while, 86% of customers expect the same in return—transparency from businesses in relation to their guiding principles and pricing policies. This is where the disconnect begins. The reality is, not all firms favor the idea of uniform pricing; at times, they may want to sell their products or services at a different price. In turn, purchasers might instantly rescind their investments if eCommerce players don’t demonstrate a commitment to price fairness.
Is transparency, then, a major casualty of digital selling?
Here’s what we can anticipate: firms can control prices. They may tailor their offerings according to their clients’ purchase history, the device they are using, or their online search behavior—and freely advertise it on their sales channels. But it’s important to clarify exactly why digital leaders prefer a specific set of pricing parameters, all while placing a significant emphasis on the product’s value.
The Case for Personalized Deals
Digital selling is, for many, at the crossing point of two extremes—the implausible and the inevitable. To efficiently manage their digital sales channels without corroding customer trust, manufacturers have to see a step or two ahead; and sometimes, at a moment’s notice.
Take, for example, personalized pricing—the practice of “dynamically setting individual-consumer prices for the same product or service according to consumer-identifying information,” such as IP address, location, or browsing history. This pricing model might prove highly profitable for a merchant, but uneven costs may also provoke negative fairness perceptions. There are strong reasons to think that eCommerce players acknowledge this possibility. Industry experts point out that webstore owners are possibly reluctant to exhaustively implement this pricing practice due to the fear of consumer backlash.
It’s true that manufacturers have to carefully think through every possible scenario. They should also take it upon themselves to ensure that customers are fully aware of the price dispersion measures adopted by the firm and that buyers see beyond the price to recognize the value of the product.
Openly communicating with the public about the company’s pricing procedures is unlikely to prompt revolt among customers. After all, “personalized pricing is fair,” experts argue, “[and] the reason is that consumers are not all the same.” Webstore owners can sell the same product to varied buyers at differentiated prices as they are:
- Customizing products to individual customer needs
- Adjusting the markup to their buyers’ valuation for a product or service
- Adding additional services that increase the initial value
After digital leaders publicly declare why they’re adjusting the price—and, as the case may be, modifying the product features according to the client’s specific demands—they’re likely to bypass negative consumer reactions. If the product is custom-made, a generic “Call for pricing!” or “The price range starts at [$X]!” message should be displayed on the firm’s web page to remove any ambiguity from the offering.
This isn’t to say the customer takes up the reins. Webstore owners commonly gain full control over price visibility by deciding when the shopper can view the value of a given item—before log in or after the customer adds the product to the cart.
One way to appeal to the customer’s curiosity is to hide the product price and add-to-cart button for non-registered users. This way, potential buyers are encouraged to register on the webstore and, in the process, they leave a trail of data behind, including their contact information and insights that help sellers outline the buyers’ willingness-to-pay.
Putting a Price on Digitalization
Digital leaders are lurching forward in a direction that spells disruption.
The negotiating table is changing. Digital products are being priced differently. Transparency is creating perceptions of price unfairness.
Yet, perhaps most notably, there’s still no substitute for quality in the era of cost transparency. It is
that better products and services will always command higher premiums. As clients readily reward value-based products that satisfy their distinctive needs, it’s crucial that manufacturers continue to craft better-quality products and counteract cost transparency through innovation.