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How can you make your pricing strategy more flexible?

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Pricing is one of the most important decisions you make as a marketer. It affects your revenue, profit, customer perception, and competitive advantage. But how do you know if your pricing strategy is optimal for your target market and your value proposition? How can you test and adjust your pricing to respond to changing customer needs and preferences? How can you make your pricing strategy more flexible?

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1 Why flexibility matters

A flexible pricing strategy is one that allows you to adjust prices based on factors such as demand, supply, customer segments, seasonality, competitors, or product features. This strategy can help you capture more value from customers with different willingness to pay, increase sales volume through discounts or incentives for price-sensitive customers, enhance customer loyalty and retention with lower prices or perks, differentiate your product or service from competitors by offering unique pricing options, and experiment with different pricing models and tactics to find the optimal one for your market and goals.

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Salif S.

Meta & YT creatives for 7-9 figure ecom brands | Trusted by 50+ brands, including: True Classic, Omnilux, AS Beauty, PetLab, FitTrack
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The pricing depends on various factors, like - The audience - The niche - Service packages - Credibility - Experience Once you figure out these factors, it's easier to make the pricing more flexible. Remember, flexibility isn't targeting every customer, it's about who you're comfortable enough to work with.

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Michael Swenson

VP Digital & Ecommerce @ Bluewater
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Flexibility in pricing creates choices and reduces friction. Choices enable more control- which every person and business want more of. Control of risk. Control of investment. Control of the sales process.

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James D. Wilton

GenAI & SaaS Monetization Expert | Author of Capturing Value
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Ideally, flexibility in your pricing helps you price differentiate across customers with different willingness-to-pay. Willingness-to-pay may vary based on a large number of factors, and a pricing strategy that allows you to address all these factors can theoretically help you find the optimum price (and, potentially, offering) for a customer. You can look at the opposite case to see the benefits. In a highly rigid pricing structure, a customer who you could potentially service profitable may not purchase anything because there is no offer providing the right amount of value at a price they are willing to pay for. This could be viewed as lost revenue/profit.

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2 How to design a flexible pricing strategy

When designing a flexible pricing strategy, you need to consider your value proposition, target market, pricing objectives, methods, and tactics. Your value proposition should clearly communicate the unique value your product or service offers to customers. Your target market should include ideal customers, their needs, wants, pain points, and expectations. Your pricing objectives should be determined by goals such as maximizing revenue or profit. Pricing methods can include cost-based, value-based, or competition-based, while pricing tactics may involve discounts, bundling, tiering, subscriptions, or freemium.

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3 How to test and optimize your pricing strategy

Testing and optimizing your pricing strategy requires creative methods and tools, such as A/B testing to compare two versions of your pricing, surveys to ask customers or prospects directly about their preferences, analytics to measure performance of your pricing, and tools such as pricing calculators or optimizers to automate or enhance your pricing processes. A/B testing can help you identify which version of your pricing performs better in terms of conversions, sales, or other metrics. Surveys can validate your value proposition, segment customers, or measure willingness to pay. Analytics can identify trends, patterns, or anomalies in your pricing outcomes. And tools can simplify or enhance your pricing decisions.

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Laura Mingail
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Identify how you will test the impact of your flexible pricing strategy on your audience's long-term perception of your brand, and not just on short-term sales. Ensure that your flexible pricing strategy and how it is communicated does not harm essential elements such as brand trust or future purchase consideration.

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4 How to communicate your pricing strategy

Communicating your pricing strategy requires effective messaging and positioning techniques, such as a value proposition that outlines the unique value of your product or service and how it differs from competitors. You can also use framing to emphasize the positive aspects of your pricing, or anchoring to create contrast, context, or credibility. Additionally, transparency is essential for building trust with customers and avoiding confusion or dissatisfaction.

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5 How to adapt your pricing strategy

Adapting your pricing strategy requires regular monitoring and evaluation of your pricing performance and feedback, as well as adjustments as needed. Additionally, customer behavior, market conditions, product life cycle, and innovation are all factors that may affect your pricing strategy. For example, customer response to your pricing, external factors such as demand, supply, competition or regulations, the stage of your product or service, and adding new features or value to your product or service can all influence your pricing. By considering these factors when developing a pricing strategy, you can ensure that your pricing is effective and successful.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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James D. Wilton

GenAI & SaaS Monetization Expert | Author of Capturing Value
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It's important to note that there is such a thing as TOO flexible. If you don't put a structure around the factors you are incorporating in your pricing (i.e. tightly controlling how much different factors affect the price), you will be creating a "free for all" where a sales team could charge whatever they want to whatever customer they want. While in theory this gives great potential for price differentiation, in reality it is likely to lead to unnecessary discounting / value leakage as the sales team looks to maximize conversion and increase revenue.

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How can you make your pricing strategy more flexible?

1

2

3

4

5

6

1 Why flexibility matters

2 How to design a flexible pricing strategy

3 How to test and optimize your pricing strategy

4 How to communicate your pricing strategy

5 How to adapt your pricing strategy

6 Here’s what else to consider

Creative Strategy

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How can you make your pricing strategy more flexible?

1

2

3

4

5

6

1 Why flexibility matters

2 How to design a flexible pricing strategy

3 How to test and optimize your pricing strategy

4 How to communicate your pricing strategy

5 How to adapt your pricing strategy

6 Here’s what else to consider

Creative Strategy

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