Build Customer Loyalty & Increase Revenue with Personalized Prices & Deals [Data-Driven]

0
312
How to Build Customer Loyalty with Personalized Prices | MageWorx Magento Blog
Reading Time: 5 minutes

Getting it right with pricing and timely deals is always a challenge. It’s the question of keeping up with the competition, knowing how much your customer base is willing to pay and a fear that the ROI will be low or worse yet, nonexistent. Data collection (and getting to know who the customer is) has moved us closer to tailoring prices and deals to individual shoppers.

In this blog post, we’ll highlight:

  • if personalized prices & deals are the reality we live in,
  • why you lose money without creating personalized deals & prices,
  • how well customers resonate when seeing numbers, they are willing to pay,
  • what you can do to personalize customers’ shopping experience in Magento 2.

Why Personalized Pricing is Getting Trendy

Personalization in marketing is not new. Let’s take advertising. Marketers successfully track shoppers’ activities, how buyers interact with a brand/product, analyze their journey, and generate advertising/retargeting that correlates with each stage of shoppers’ online interactions.

Personalized pricing and promotions are no different. While it might raise particular concerns among privacy and consumer advocates, this level of personalization is a new trending step to closing a successful deal. Actually, it’s going a little reverse in time. Before the price tag was invented in 1861, it had been common practice to negotiate prices with a buyer―merchants used to offer customized prices based on their personal assumptions about payment abilities of a purchaser. In eCommerce, we’ve got data analytics today.

Thus, airlines sell tickets which prices differ significantly. Your fellow traveler is likely to pay an absolutely different price for a seat next to you. Airlines analyze, whether a passenger travels for business and may charge expense accounts a little more. Imagine how diversified pricing could become if such aspects as location, income, number of kids, credit score, etc. could get evaluated to know how much a shopper is willing/able to pay for a specific good/service. In fact,

How to Build Customer Loyalty with Personalized Prices | MageWorx Magento Blog

The potential behind personalization is huge. It will probably take us some time to get used to it―just as we’ve got used to retargeting ads that run after us across the web―or, are we already living in the world of personalized pricing, though unconsciously?

How to Build Customer Loyalty with Personalized Prices | MageWorx Magento Blog

We are Living in a World of Uneven Prices

The example with airlines as mentioned above, kids going to same dance schools in different cities and their parents paying different fees for same classes, different fees for studying at the same university, financial-aid packages, and so much more. Pricing personalization is all around us, though it might not yet be considered as such.

Remember a recent post from Forbes about Uber using AI to charge different prices during a different time of the day? Or, Facebook displaying you shoes that cost 2$ cheaper at the competition online store B based on your recent online window shopping at online store A. Though it’s more about effective retargeting in case of Facebook, I am sure you get the idea.

Benefits and Drawbacks of Personalization

Any activity has its drawbacks and benefits. When it comes to pricing and personalized coupon codes giving, it’s the matter of how well you know the fine art of haggling, how prepared you are to negotiate for a steeper discount, and (cough) how well you actually know your customer base.

How to Build Customer Loyalty with Personalized Prices | MageWorx Magento Blog

Pro’s of price & discounts personalization

Additional sales

Different customers have a different level of willingness to pay. Roger Dooley, in his Brainfluence, proves the idea using multiple real-life examples.

Personalization will help you make additional sales with that part of your customer base who finds it hard to part with the money.

Greater customer satisfaction

Users are unique, and they love to be treated as such. Sales, deals, and pricing based on customer-level data can help make your brand more memorable, thus keeping your buyers returning.

Con’s of price & discounts personalization

Reluctance

For the many, experimenting equals accepting that you do not know what should have been previously done. Which is not the truth. However, for the majority of decision-makers, it’s a challenge to plunge into prices testing.

Offended sense of fairness

There are undoubtedly multiple kinds of pricing discrimination. Often, they are widely used by marketers but not considered as such (so what).

For example, it’s common practice to see a ‘Buy 2―Get 1 free’ deal or sliding prices based on the quantity a shopper buys. With 3 common degrees of pricing discrimination, my examples would be of second-degree. Customers segmentation into groups, such as wholesalers, VIPs, retailers, etc. and selling goods of the different cost would be third-degree. However, situations, when every shopper gets a unique price would be commonly considered the first-degree, though technically hard to realize.

With all that said, let’s now see what default Magento 2 offers when it comes to pricing & deals personalization, and what can be done to expand the core functionality.

How to Build Customer Loyalty with Personalized Prices | MageWorx Magento Blog

How to Personalize Customers’ Shopping Experience in Magento 2?

In Magento 2, you can come across ‘Customer Group Prices’ functionality, which equals tier prices in fact. It allows you to set different prices for different product quantities and enable these offers for specific customer groups. However, these prices do not overwrite a product’s main price on the front-end. They add the tier prices table:

Follow the link to see the official user guide for Group Prices setup in default Magento 2.

However, if you wish to go further and bring more personalization, such as:

  • display various prices for different customer groups,
  • set specific prices for hand-selected customers,
  • generate customer-specific coupon codes,

MageWorx Customer Prices Suite can be of much use for you as at incorporates three powerful features: a) customer group prices b) personal customer discounts and c) prices per customer.

5 Common Use Cases for the Magento 2 Customer Prices Suite extension

1. Magento 2 default ‘Customer Group Prices’ vs MageWorx ‘Group Prices’

Use Case #1

“I know that in default Magento 2, ‘Customer Group Price’ equals tier prices and allows setting different prices for different product quantities, including a possibility to enable such offers for different customer groups.

I want to go beyond adding the tier prices table on the frontend and overwrite a product’s main price, i.e., replace the default product price completely everywhere on the front-end.”

2. Correct group prices visible for each customer group

Use Case #2

“I have 400+ customer groups and wish to make correct group prices visible for each group on product view, category and featured block.”

3. Special product prices for individual customers

How to Build Customer Loyalty with Personalized Prices | MageWorx Magento Blog

Use Case #3

“We wish to display special product prices for our most loyal customers while displaying how much a regular customer would pay.”

4. Discounts for hand-selected customers

How to Build Customer Loyalty with Personalized Prices | MageWorx Magento Blog

Use Case #4

“We had an email marketing campaign. Specific customers have interacted with our newsletter. I was thinking of retargeting and allowing those specific customers to use a personalized coupon code.”

5. Bulk prices setup, update, and editing

How to Build Customer Loyalty with Personalized Prices | MageWorx Magento Blog

Use Case #5

“I am looking for a fast way to set custom prices for numerous customers and products at once”.

It’s much more than what the Customer Prices Suite is capable of. Unsure whether it will meet your business needs or not, feel free to drop us a line at [email protected] We will be happy to assist!
Customer Prices Suite

We’ve offered you some insights and stats on personalized pricing and coupon giving. Do you use such tactics in your Magento 2-based store? Would you?

Please, share your ideas in the comments field below.🙂

LEAVE A REPLY

Please enter your comment!
Please enter your name here