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Tip of the Spear Ventures

Venture Capital | Business Transformation Consulting

customer experience

How Brands Use Pricing Strategy to Improve Customer Experience and Increase Brand Value

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The Point: Is the pricing strategy you establish for your organization’s products/services the “right” price? By the “right” price, what’s really at stake is what will enhance the customer experience and increase your brand value. From the pricing studies that we’ve conducted, we’ve seen a number of organizations that are challenged while at a 3-pronged fork in the road when it comes to establishing pricing strategies. In this article, we’ll explore an overview to pricing strategy and the inherent benefits associated with customer experience and brand value… Enjoy!

Pricing Strategy 101

Pricing Strategy can be a powerful tool to increase brand value and attract new customers. Brands use value-based pricing to create a range of products and services at different price points. The goal is to make each product or service stand out from the rest of the market. To do so, brands must create a meaningful difference between their products and those of competitors, and give consumers an apparent reason to pay more. Brands that employ a premium pricing strategy often target a particular segment of consumers.

Pricing Strategy as Competitive Advantage

While low prices are often appealing to consumers, they are also perceived as cheap and can erode brand value. Price changes must be carefully considered, as they are almost impossible to reverse. If a competitor is already offering a product or service at a low price, they may have the upper hand. Using discount pricing can help a business to attract more foot traffic and to clear out old inventory, but it could also lead to negative effects on the perception of quality.

Pricing Strategy and Organizational Goals

Developing the right pricing strategy is essential for any business. There are many factors to consider, so it is a good idea to calculate COGS, profit goals, and customer needs to create the optimal pricing strategy for your product or service. Once you’ve done that, you’ll be ready to start your pricing journey.

Pricing Strategy – First Steps

The first step in creating a profitable pricing strategy is to define your target audience. A target audience’s price sensitivity will help you determine the appropriate pricing strategy. For example, if you have a product with high price-sensitivity, price-skimming may be a good strategy. If you have a limited market, a low price strategy may work well for you.

Pricing Strategy is an ongoing process. Ideally, you should use CRM software to segment your customer base and test different pricing strategies. Developing a successful pricing strategy requires time and effort. However, the right pricing strategy should be well-supported with your go-to-market strategy and marketing plan. In order to determine the best pricing strategy, it’s important to gather feedback from your sales team. You should also evaluate your competitors and gauge their pricing strategy.

There are many different ways to price your products and services. For instance, you can price a product or service above your competitors, while you might be able to match them using a value-based model. For a more profitable strategy, you might want to price your products or services below your competitors. This strategy, however, requires more research and insight into your competitors. It’s also important to evaluate your own costs and resources in order to determine which pricing strategy works best for your business.

Another pricing strategy is loss-leader pricing, where you offer a low-priced item with the hope that consumers will buy more. This strategy works well if you want to attract new customers. If the price of your product or service is a significant part of your business, you might choose to charge higher prices for ink to attract more potential customers.

SUMMARY

In this article, we’ve explored pricing strategy from an overview perspective along with inherent benefits associated with customer experience and brand value. Crucial in establishing the pricing strategy are identification of competitive advantage and organizational goals. We’ve also explored a few additional “first steps” that should be considered in doing so.

Sam Palazzolo

KEYWORDS: Pricing Strategy, Competitive Advantage, Customer Experience, Marketing, Competitive Strategy, and Organizational Goals

Healthcare CX Transformation: A Broke System Creating Broken Hearts/Dreams

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I’ve spent the last month in/out of some of the country’s largest (best?) healthcare systems. Not as a consultant or venture capitalist working on a healthcare cx transformation, but as a patient. Here is a summary of my customer experience: Regardless of the hospital size, location, and reputation all I can say is, “Come on healthcare… You’ve got to do better than this!” The modern healthcare system is broken, and at the frayed end of the whip is the customer (or patient and their family/loved ones). There is a tremendous lack of patient engagement highlighting the importance and benefits of an omnichannel consumer experience, especially in light of providers and payers (insurance) struggling to communicate with care, compassion, and ethics.

Without Your Health, What Do You Have?

I’ve seen it throughout my professional career/personal life… Those that seemed to put off til tomorrow what they could have been doing today in the hope that they would be in a better position to live the life of their dreams. Of course, some made it happen while others didn’t for a variety of reasons (i.e., poor business decisions, market conditions, etc.) But there is one group that never achieves that nirvana dream life, those that have poor health.

One of my mentors shared with me early on in my professional career, “Just remember Sam… Without your health, you’ve got nothing!” It was meant to be a sobering reminder to take good care of myself (body and mind). But as a freshly minted-MBA graduate with the world as my oyster, I can honestly say that their message rang hollow and didn’t resonate (I instead adopted a “Work hard, play hard” philosophy!)

If it sucks to grow old, and age is the one facet of life you can count on doing (you can/should rule out getting hit by a bus to stop the aging process), then we’re all going to advance in years. Along with those advancing years comes a myriad of opportunities/problems/struggles. And unable to escape the gravitational pull of aging years and health issues, I found myself in/out of several hospitals for nearly all of the last month.

Maybe It’s Just Me, Maybe It’s COVID-19, or Maybe It’s Broken Healthcare!

Healthcare that is of high quality no longer is available in traditional clinical settings and the spread of the pandemic has intensified the shift in healthcare delivery. As healthcare services shift away from the hospital and doctors offices, it’s more vital than ever before to get healthcare consumers involved and build the healthcare experience from that of the customer, or patient. This is not just about better engagement strategies, but also a major improvement in the healthcare customer experience (CX) which has been in a rut in comparison to other industries’ CX (more on this in a minute). As a patient, I struggled with attempting to identify “How can payers and providers enhance the CX and get people involved in their own health right now?” (and apparently so did they!)

Healthcare can draw lessons from methods of engagement for consumers employed by other industries. If you’re like me, you’ve probably seen how fitness, entertainment and other industries demonstrate the way that omnichannel experiences can lead to greater engagement. Digital experiences let companies engage with customers more frequently and in greater depth, not every day or even twice a year, as is the case in healthcare.

In extending the frequency of interactions with consumers to weekly or monthly with omnichannel engagement strategies healthcare providers and payers can offer guidance, education and preventive services that support the business goals and improve health outcomes.

The Consumer Experience in Healthcare Reimagined

The current healthcare CX is not designed specifically for consumers, patients, or their families. The majority of healthy consumers are only engaged a few times per year, and the payers and providers naturally interact more frequently with people with chronic illnesses and/or require immediate treatment. Healthcare systems for consumers are difficult to navigate and the experience is sporadic and confusing (understatement!), with a variety of options and unreliable user interfaces (even face-to-face).

So, what do I want from my healthcare experience? I don’t think I’m alone when I share that healthcare customers want a modern/easy experience, with a central location to get access to the information, navigate and pay for healthcare in a manner that’s customized, digital and always available. Afterall, other industries utilize platforms to provide a consumer-focused and omnichannel experiences for their users, so why not healthcare? These platforms make use of information to orchestrate and create customized user experiences. Consider how Netflix utilizes your history of streaming to suggest content regardless of what device you’re using.

Why Is The Long Road To Recovery So Long?

I find myself healing, perpetually exhausted, and all the while swimming through the seemingly unending stream of bills coming my way. A process that I’m pretty confident has been elongated by healthcare payers and providers. If I sound frustrated, it’s because I am. If I sound optimistic, I am not. I’m left with a continuous thought of, “Come on Healthcare… You’ve got to do better than this!”

Sam Palazzolo, Managing Director @ Tip of the Spear