Can we charge different customers different prices? You bet we can!

In this episode of Pricing College – Joanna introduces and explores the concept of segmentation.

For the vast majority of businesses – whether selling to consumers or to businesses – you will likely want to tailor your offer, and charge varying types of customers different prices.

This could be due to some customers buying much more – or requiring additional services or value adds. Segmentation is vital as a step to understand your customers – and charge the “right” price.

TIME-STAMPED SHOW NOTES:

[00:45] Many companies are investing in segmentation technology.
[01:10] How can a new start up segment their offer and charge customers different amounts.
[01:40] Many companies still use demographic and location based segmentation – and some do not segment at all.
[02:40] When you fail to segment – value based pricing is almost impossible.
[03:30] Psychographic segmentation – Aidan has no idea what it is! So Joanna explains.
[04:50] If you fail to segment – you will undercharge some and overcharge others. Missing c. 80 percent of your potential customers.
[06:10] By knowing who your customers really are – you can tailor your services much better.
[07:10] You need to dig deep – to really understand value drivers.
[08:00] Lots of software systems have pre-programmed segmentation – that may not actually suit you business.

LINKS MENTIONED IN TODAY’S EPISODE:

Psychographic segmentation

Price segmentation