A company desperately needed insight into its customer base. Its pricing strategy was to simply maintain the cheapest prices on its high-selling lines, but had no idea who was buying the products, or why. So they reached out to dunnhumby to find out what customers want, where they want it, and how much they’re willing to pay for it.
A dunnhumby analysis segmented the customers into three types: price-sensitive, mid-market, and high end. Next they identified the products most important to price-sensitive customers and compared the retailer’s prices to those of its competitors. Overall, the retailer was 4% cheaper than the competition, but dunnhumby wanted to optimize the customers’ price perception.
Based on the customer analysis and subsequent insights, a pricing strategy was devised and tested:
The pricing strategy had a positive impact on sales: