Dynamic pricing doesn’t have to alienate your customers

Dynamic pricing, the practice of varying prices in response to shifting market conditions, has been in the news a lot recently, and not exactly for good reasons

Inflation-weary consumers are now seeing significant and frequent price changes across a range of product categories. Many see dynamic pricing as a clever tactic used by large companies to increase profits, leading to growing frustration and resistance.

Key takeaways

• Despite the criticism of dynamic pricing, sticking with static prices is not a perfect solution. Fixed prices treat every customer and transaction the same, ignoring the inherent variability in different situations;
• In today's volatile markets, it's hard to imagine a business surviving without the ability to adjust prices in response to economic changes such as inflation, recessions, pandemics and other major disruptions;
• But is there a risk that companies are taking dynamic pricing too far? While price changes are a common experience for consumers, it can become problematic when these changes are unpredictable or require meticulous planning for everyday activities such as eating out or going on holiday.

Get the full story at Harvard Business Review