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Pricing Trends in 2020

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The revenue growth management and pricing disciplines are in constant growth, with more and more companies seeing that revenue and price optimization can deliver additional profit growth as well as help with managing the overall market position.

At PriceBeam we are 100% focused on pricing and revenue growth and these are some of the trends that we see:

Power to Consumers

Consumer choice has never been greater than now. They can purchase products or services 24x7 and often from a multitude of channels. They often have many choices of brands, and in more and more industries they compare prices using online tools. Also, they vote with their money: in a recent study from PriceBeam, we saw that companies who rated as "excellent" in customer service had a willingness-to-pay 23% higher than their current price. However, companies that rated "average" in their customer service had a willingness-to-pay of -5% (MINUS 5%). In other words: excellence is the new standard and average is no longer good enough.

More Data and Insights. Less Guesswork

Pricing has historically been of the business disciplines with the most guesswork or quick solutions. Whatever the price was last year, we just add a few percentage points to it next year. Or we don't change prices at all. Or, we don't KNOW what customers are willingness-to-pay, but so far so good. This is already changing thanks to many new tools in the price optimization space, and it will change even more in 2020. A cloud-based solution like PriceBeam means that pricing insights are no longer the very expensive 6-figure proposition from the old-fashioned research companies. Nor is it a 4-month process. On the contrary, with cloud-based price research tools, such as PriceBeam, you can get insights into customers' and consumers' willingness-to-pay in just a few days or weeks, and at a cost of less than a quarter of the old-style market research. Easier access and lower costs mean that more businesses will use these insights to take the guesswork out of pricing.

Dynamic pricing / Individualized Pricing

Prices used to be something you changed once every year at best, and the same price applied to everybody (in B2C). This is rapidly changing into a world where prices are changed monthly, weekly, daily or even on-demand each time a customer requires it. On top, prices are more and more individualized rather than one-price-fits-all. Of course, this has been the norm for some time in certain industries such as e.g. airlines, where the same seat is sold at vastly different prices. But in particular with many industries going from sale upfront to subscription businesses, we see changes in how often prices are changed, and how individual they are. Even classical food retailing is experimenting with changing prices as the goods come nearer to their good-before date. Online service providers change prices based on demand, supply, customer willingness-to-pay and a number of other factors.


Operating in a digital world is of course not new. But the advent of new digital business models means that pricing needs to change with it. Subscription businesses mean that price is no longer a one-time thing. Availability of products and services online mean radical changes in price transparency. And digital delivery also means that it is much easier to change prices with changes in either supply or demand.

Pricing as a KPI for Other Business Areas

Pricing is important for Marketing in many ways: What are consumers willing to pay, compared to the current price? If WtP is greater than today's price, you probably have a health brand. If WtP is less than the price you are charging, there may be some brand health issues. In customer service, pricing is also becoming a KPI to measure performance. As from the example above, if customer service is excellent, then willingness-to-pay increases and you can charge a higher price. If on the other hand customer service is average, then you get punished. We will see that other business areas of the corporation will use pricing as a KPI to measure their success, or we will see that the revenue / pricing teams point out how excellent a success indicator price performance is when spreading the gospel of price optimization.

Globalization of Pricing

The world has seen an increasing globalized way of doing business for decades of course, but still one of the key challenges in doing business internationally is how to set prices across borders. The fact remains that the same product or service is still sold at prices that vary with 50-100% between countries, depending on the industry. This in turns puts pressure on pricing and sales teams in particular on how to manage these price differences, but also on marketing on how to utilize that customers in one country truly are willing to pay a higher price than in another country. Why give away that opportunity to price higher? Tools such as PriceBeam helps manage the insights into international differences in willingness-to-pay, by not only being available in 109 countries worldwide but also by its built-in translation and handling of languages, currencies and other local specifics.

Pricing as part of the innovation process:

Pricing has in the past often been an afterthought to product or service innovation: we have now developed this new product and we now need to set a price. This approach cannot continue as more than 80% of all new product launches are considered failures by their owners, with one of the root causes being that there is a mismatch between what the company thinks the product should be priced at and what the market is willing to pay. Therefore, we will see that price research will become more integrated into the innovation process and introduced at an earlier stage. If you can test the willingness-to-pay for different concepts 12 to 6 months before a potential launch then you both can steer the innovation in the direction of increased value for the customer and also avoid (some of the) costly mismatches between final price and the willingness-to-pay in the market. One of the driving forces behind this is the increased availability of fast and cost-effective (=cheaper than in the old days) market research within pricing and willingness-to-pay.


If you are interested in learning more about how PriceBeam can help your business, schedule a demo with one of our pricing experts.