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Strategic pricing enhances customer acquisition, retention, and satisfaction across all industries, whether it’s hospitality and travel, or retail goods. In a new era of banking, where interest rates are quickly rising, banks need to consider strategic pricing to maintain customer stickiness and remain profitable.

With strategic pricing, banks can customize the fees customers pay and offer them individualized rates based on their banking profiles to create a more personalized banking experience. Using pricing to incentivize client behavior not only offers increased savings but also establishes loyalty – something banks are desperate for.

What is strategic pricing?

At its foundation, strategic pricing is flexible/dynamic pricing based on current market demands. It is second nature to industries like hospitality, travel, and retail goods, as algorithms account for competitive pricing, supply & demand, time of day, and on-demand service spikes to affect an ever-changing, real-time price, and profit margin.

In financial services, dynamic pricing is predicated based on the individual customer relationship with the bank – as an expression of client relationship. It’s comprised of two parts:

  • Strategic pricing

  • Pricing execution

Because the type of pricing strategy is customer-oriented, not product-oriented, true dynamic pricing requires a fundamental shift in how banks have looked at overall customer profitability.

This shift in pricing strategy means no longer looking at individual products as revenue drivers, but rather at the individual customer’s portfolio of products and services as the revenue driver, in both retail and corporate banking.

How does digital banking fit into the picture?

There’s another factor forcing traditional financial institutions to consider raising their rates –

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