Putting Pricing Strategy at the Heart of Your Brand
One of the best tools that I had when I was managing stores was Psyche Walks. Basically, I would put myself in the mindset of a particular customer persona—mom, single dad, credit hungry customer, single twenty-something, etc.—then I would have a “shopping experience” in that mindset. I would start from the parking lot and go all the way through to checkout.
After my walk was done I would write detailed notes and glean what I could about my store, my employees, my products, etc. What I was doing was thinking like a customer. I was hoping to squeeze some extra sales over the course of the week as my suggested changes were implemented. I would then repeat the process again the following week.
Once I started executing this process I continued it until the day I handed in my keys. I believed it so much that I required all of my managers to do at least 2 a week as well. Anyone who worked for me knew that my philosophy was that the key to success is putting the customer at the forefront of the entire experience.
This philosophy is not revolutionary in retail. Countless numbers of books have been written about how to train your people to deliver a compelling experience that puts the customer at the center of everything you do. There are just as many books on how to merchandise your store so that the customer feels that the store was made for them. (In an interview with Progressive Grocer, Tim Lowe, President of Lowes Foods Stores, does a great job highlighting how they put their customers at the center of their brand strategy in this 5-minute video interview.)
What is revolutionary is using dynamic pricing to listen, sense demand, and carefully craft your pricing practices so that they feel they are getting the products they want at the price that’s fair to the shopper – so that you can focus on delivering value.
One of the reasons it has been so hard for retailers to operationalize dynamic pricing is the perception that it can be hard to implement correctly. It requires not only pricing expertise but also a deep understanding of competitors, market and customers. The good news is that now with dynamic pricing, you can tap into competitive, market and customer data to craft meaningful pricing strategies without losing market momentum – both online and in-store.
More importantly it requires a solution that does “psyche walks” focused on pricing; to think like a customer and then make recommendations based on how customers will react. High-performing retailers who are putting pricing at the heart of their brand strategy include Lowes Foods, eBags and CPO Commerce.