Customer-centric pricing: The surprising secret for profitability |
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Authors: | Robert G Cross Ashutosh Dixit |
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Institution: | aRevenue Analytics, Inc., USA;bTerry College of Business, University of Georgia, Athens, GA 30602, USA;cJames J. Nance College of Business Administration, Cleveland State University, 2121 Euclid Avenue, BU 458, Cleveland, OH 44115-2214, USA |
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Abstract: | Companies spend enormous amounts of energy and capital in creating value for customers, but less regard is given to actually capturing the value they have created. Segmentation based on buying behavior uncovers a tremendous differential in willingness to pay for subjective product attributes such as convenience, status, and quality. Purchase decisions are made through an assessment of a myriad of factors balancing perceptions of value components against price in a subtle, complex, and often sub-conscious decision matrix. Customer-centric pricing requires the simultaneous and continuous assessment of product attributes, customer perceptions, and the circumstances of time and place by listening to customers' actions. It is a means of assuring that companies assess the value they create for customers and extract that value from the marketplace. |
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Keywords: | Customer-centric pricing Segmentation Profitability |
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