Think Customers: The 1to1 Blog

Consider my personal shoe-shopping preference. I love a bargain as much as the next person, and sometimes even enjoy the vastness of DSW. But what I love more is the atmosphere and service at Nordstrom. I will always go there first when I need shoes because not only does it carry brands I like, but the associates go out of their way to be helpful. One time, for example, the “perfect” shoes were just a bit loose in my size, so the associate brought me two different types of shoe liners, had me test them both, and then sent me on my way with the shoes and extra liners of both types—liners that go for $3-5 per set in the drug store.

The point is, I’m willing to pay more because I value the overall customer experience Nordstrom offers.

What got me thinking about all this was a webinar I just moderated, Customer-Centric Pricing: Building Customer Loyalty by Charging a Higher Price. It almost seems counterintuitive that a higher price can be an odd sort of retention tool, but in some cases in can. The trick is to understand customers and know what they’re willing to pay more for.

Luxury brands may command a higher price because of cache, but customers are willing to pay a premium for other reasons as well. Perhaps it’s a service that’s tied to a product, like birthday reminders from a florist. Or an exclusive experience for high-value customers.

In the webinar Impact Planning Group partner Tom Spitale talked about how to determine which customers are willing to pay more and for what, as well as how to create a pricing strategy to match. He also showed a scoring tool designed to help determine whether you’re charging too much or leaving money on the table.

These days it’s ever-more challenging yet imperative to show a return from customer-based initiatives. Customer-centric pricing is one approach that can help.