Dunnhumby: Five tips for a positive price perception

Price perception is determined by a variety of factors. Marc Fischli, Managing Director, Customer Data Solutions at Dunnhumby, gives five tips on how retailers can price their products effectively and thus have a major influence on the price perception of their customers.

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1. effective promotions through customer data: Most promotion programs include too many products from the same category. This leads to a cannibalism effect, whereby in the worst case one product is displaced by the other. Retailers should consider analyzing customer and behavioral data to determine which products should be marketed and how.

2. the best prices for the main product lines: Every retailer should know its key products and be aware that pricing here has a particular impact on customer perception. It is therefore worthwhile to set particularly low prices for these products, which has a positive impact on the general price perception regardless of the prices of the rest of the range. It is important to note that this is not always about the big brands. Customer data is the key here as well.

3. a good feeling through personalised offers: The customer does not want to be one of many. He should be given the feeling that he knows exactly what he needs in his individual situation. Against this background, promotions according to the watering can principle prove to be decidedly inefficient. Instead, retailers should use part of the budget for personalized offers. This requires a comprehensive insight into the customer's profile.

4. private labels represent good value for money: A strong own brand, under which all key products are offered in good quality and at a good price as an alternative to well-known brands, has a major influence on the positive price perception of customers.

5 A comprehensible offer creates trust: It is important to offer the customer a choice of different products at the same price. In addition, customers expect comprehensive product bundles with better value for money. A comprehensible price hierarchy with simple promo mechanisms also has a positive effect on perception. Especially when a very extensive assortment is available.

 

Dunnhumby is a global data analytics provider. The company analyzes customer data and uses insights on nearly one billion shoppers from around the world to create personalized customer experiences across digital, mobile and retail.

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