Pricing products and services correctly is vital for growing profits while rewarding your most loyal and profitable customers. Pricing mistakes are a leading cause of customer defection and profitability erosion.
If pricing changes are not simple and clearly communicated, customer confusion can lead to customer losses. Raising the wrong prices can actually lower total revenues.
The Challenge
- Need to change pricing to better reflect usage of services by customers.
- Need to see which customers will be most affected by proposed pricing.
- We need our new pricing to be revenue-neutral but re-distribute costs among our most profitable and least profitable customers.
- We don’t want to harm our most profitable customers.
- Is there any way to find out which customers are costing us money and price them accordingly?
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PNT's Solution
- Analysis of all services, transactions by channel for all customers (or households) to develop new pricing scenarios.
- Apply new pricing to all customers’ recent histories to evaluate impact of new scenarios.
- Customer dynamics reporting looks at all customer activities in each channel as well as all customer revenues.
- Customer profitability analysis and deciling will reveal segments to be targeted for “defensive” pricing.
- Customer profitability analysis and deciling will reveal segments to be targeted for “offensive” (up-or-out) pricing.
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