Dynamic pricing is already here

For our industry there is only one problem with this headline. It is not in our industry. Nor is it airlines or hotels, where ‘dynamic’ pricing has been annoying customers at busy times for many years.

It is retail – B&Q are trialing dynamic pricing at a flagship store in France.

It works by like this, according to an article in MyCustomer.com:

The Wi-Fi connected price tags placed at the edge of the shelves will identify loyal customers by a chip in their mobile phone that will deliver their loyalty card data and change the price of the item accordingly.

 If you are a loyal customer then you get a better price, a special offer and perhaps some recommendations based on the profile that the retail version of a billing system has looked up and figured out. The customer standing next to you gets a higher price and no special offers – although he has presumably been told several times about the advantages of being a loyal customer.

The retailer is also thinking about mimicking airlines and hotels by changing prices depending on time of day because they already know when the busy times are and when what sort of people buy what. The only difference presumably is that they will avoid annoying customers at busy times by putting their prices up.

The article reports the usual consultants advising caution and saying that although this strategy may be about increasing customer satisfaction, they need to understand the customer standing beside Mr Loyal might see him getting a better deal. In our view, Mr Nosy should stop looking over people’s shoulders and should become a loyal customer himself.

In any case, how many people on an airplane actually pay the same price for exactly the same service?

Dynamic pricing is possible and telecoms should take heed of these examples from other industries. As one telecoms veteran said not so many years ago, the modern telco billing system should behave more like a Point of Sale system than anything else.

A coveted BillingViews Award will be awarded at an Awards Ceremony to the first telco who is doing something like this. Enter Now!

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Alex Leslie
About Alex Leslie 400 Articles
Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet.

3 Comments

  1. We already do this by offering free off peak usage on our DSL product set in off peak hours. How do I get my prize?!

  2. I guess a similar approach was implemented in some of Orange entities in Africa with their “bonus zone, a service that provides the subscriber with real-time notifications when he or she is in a place or calling at a time when the network load is lower. Calls can be made at these times at a discounted rate of between 1 and 99% of the normal cost”
    (source: http://www.orange.com/en/about/Group/our-features/2013/Africa-a-network-development-strategy-based-on-innovation/Afrique/network-access-for-all)

  3. Hi!
    as a matter of fact, som operators in Africa and Asia do provide dynamic pricing on their services. At the MTN Group, they offer MTN Zone which provides dynamic discounts of between 5% and up to 99% on services , depending on location, time of day and the actual current network congestion. According to MTN Uganda, MTN Zone is their most popular subscription form, also bringing increased customer loyalty on top of the topline contribution.
    The subscription info is found at their web page: http://www.mtn.co.ug/Mobile-Plans/PayAsYouGo/MTN-Zone.aspx

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