On today’s episode, Kunle is joined by Cactus Raazi, Best Selling Author of PRICE: Maximizing Customer Loyalty through Personalized Pricing. He is also founder and former CEO of Elefant Inc., now a part of Exos Financial, which leverages AI-powered pricing to build smarter marketplaces.

Businesses are often obsessed with collecting data points for visitors and users. This would be to build out email lists, sms lists and even social media audiences. More often than not, this type of data only comes through increased marketing spends. However, there is one source we can tap where users readily share their details – our customers.

All too often businesses either don’t collect the right data or simply don’t leverage the data they have to segment customers. We know all about segmenting audiences so as to send the right marketing campaign at the right time. But what if you can segment your customers and offer a personalised price basis on the value of those relationships? This would take your customer loyalty program to the next level.

In this episode, Kunle and Cactus talk about leveraging data and price as tools to maximise customer loyalty. You will get to hear about the difference between dynamic and personalised pricing, how you can segment and reward loyal customers. This is a great episode for business owners and marketers looking to level up their customer loyalty programs.

Here is a summary of some of the most important points made,

• • Easy access to information online has increased price competition
  • Dynamic pricing only accounts for market factors
  • Personalised pricing is based on who the customer is
  • Reward to returning customers could be discounts or premium experiences
  • Having the architecture to collect and analyse customer data is crucial
  • When choosing a reward, always try to amplify the underlying motivation to buy
  • Resist thinking of your customers as a homogenous group

Covered Topics:

On today’s interview Kunle and Cactus discuss,

• Dynamic Pricing vs Personalised Pricing
• How to reward returning customers
• Segmenting to differentiate prices
• Managing rewards for big ticket products
• Pricing strategy for DTC companies
• Executing personalised pricing

Timestamp:

• 08:10 – Meet Cactus:
  • Financial services professional with 35 years of sales experience
  • Started using AI and Data analytics in the bond market back in 2014
  • “The availability of information via the internet is increasing price competition”
• 11:25 – Dynamic pricing vs Personalised pricing:
  • Dynamic pricing takes into account market factors
  • Personalised pricing factors who the customer is
  • Pricing should be a tool to maximise loyalty
• 14:30 – Pricing for returning customers:
  • Could be discounts
  • Could be enhanced experience or loyalty schemes
• 19:40 – Criteria for creating segments to differentiate prices:
  • Starts with what type of customer data you’re collecting
  • How can you maximise loyalty for different segments?
  • Avoid offering mass discounts to all customers
  • Better to offer a differentiated price or another premium
• 29:40 – Using personalised pricing for luxury products:
  • You can offer people more exclusivity
  • Amplify the underlying reason to buy
  • “Price is a direct mechanism to create value, but not the only one”
• 32:50 – Predictions for pricing strategy for DTC companies:
  • Set up the architecture to collect the right data
  • Use data of existing customers to maximise loyalty
  • Give a differentiated experience to your best customers
• 38:40 – Executing personalised pricing:
  • Using codes let you track usage
  • You have to make it as seamless as possible
  • Using a simple cookie can be very effective
  • Resist thinking of your customers as a homogenous group

Takeaways:

• Personalised pricing is based on who the customer is
• Reward to returning customers could be discounts or premium experiences
• When choosing a reward, always try to amplify the underlying motivation to buy
• Resist thinking of your customers as a homogenous group

Links & Resources

• Get the Book – PRICE: Maximizing Customer Loyalty through Personalized Pricing
• Cactus on LinkedIn

Tweetable Quotes:

“The availability of information via the internet is increasing price competition.”

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