Data Led Pricing – Professional Essays

DATA-LED PRICING WINS THE PRICE WAR

A growing retailer lacked the purchasing power to compete on price with its larger competitors. When a pricing war broke out, the retailer engaged dunnhumby to help determine what kind of response would be most attractive to its customers.
The insight
Some helpful insights were gained following a customer review by dunnhumby:
Loyalty levels were lowest amongst the company’s price-sensitive customers
Price was the #1 cause for customer dissatisfaction
The top products most important to price-sensitive customers were identified
The action
With a better understanding of its customers, the retailer took the following actions to help survive the price war and find a way to keep delighting its customers:
Identified the top products for price-sensitive customers
Lowered the prices of these products to match the competition
Communicated these prices to customers on the shelf
The results
The retailer not only survived the price war, it was also able to increase sales and grow loyalty:
Total store sales and units from price-sensitive customers +1-3%
Increased number of loyal customers shopping

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