What is dynamic pricing?
Pricing is the most important scenario when you are selling online. Its the price that compels the customer to buy online. When buying online, the customer will always compare the price with your competitors.
Dynamic pricing is a pricing strategy in which the price of a product or service depends on various factors and conditions in real time. Though the dynamic pricing is getting very popular since last few year, It’s been in market for a very long time. In 1980’s the American Airline first introduced this concept.
Business Scenarios for Dynamic Pricing
If you want to keep up with your competitors then dynamic pricing is the answer.
Dynamic Pricing can be a very profitable business strategy. You gauge the interest of your buyer and then decide the price. It’s like negotiating the price with your mind.
Let’s take an example. Say you want to color you hair. The base price might be fixed but the total price depends on the length of your hair, volume of the hair to be colored, brand of the hair color etc. This is dynamic pricing.
The global Ecommerce companies like Amazon, Ebay and retail store such as Walmart uses Dynamic pricing at a very huge level. A statistics Reports shows that Amazon Updates their prices almost in every 10 minutes.
The common belief regarding Dynamic pricing is that it might hamper the brand value which can be true to some extent that is why it has to be carefully planned. But on contrary it might convince the customer that they have some control over the factor affecting the price thus getting the value for their money.
Why we need Enquiry, Quote And Negotiation
In B2C, Prices are usually shown upfront, But this might not be the case in B2B. You might want to show your catalog to everyone but not the price. Only the Registered User can view the price.
Maybe you want to give the personalized prices to your Business partners.
Maybe you want give the special price depending on the quantity someone is buying. If someone is purchasing the quantity in big amount, You might give them heavy discount. There can be many scenarios.
Now, you might have a question that this can be achieved by using the concept of Tier Pricing . Why use Quote system?
The answer to this question is Negotiation. In B2B, Your Customer will be more than happy to negotiate the price for which they are buying the product.
In B2B, the monetary value associated with a purchase is much higher. Therefore your customer needs to be fully satisfied with all the aspects of a purchase before buying. That’s where enquiry will be needed.
All this process can be summarized as given below.
Enquiry, Quote, And Negotiation Cycle
Step 1: Enquiry
Enquiry can be a general purpose enquiry or a product based Enquiry. When an enquiry is of products then it can be converted to quote.
Customer will submit the Enquiry form.
Store owner will get Notification of enquiry by email.
- View enquiry details.
- Forwarding enquiry to the concerned person.
Following up the employee.
These can be few of the features.
Step 2: Quote
If it suits the store owner , then an enquiry will be converted to quote by an authorized person and negotiation can start for the price.
While converting the enquiry to quote the store owner can give custom price.
Quote can be shared by By Email, Message, Hard Copy to the customer.
Step 3: Negotiation
It is most important part in this cycle, totally depends on customer satisfaction and owner’s profitability.
All the communication against a quote will be visible to both customer and sales person.
Communication can be done via comment section available in customer dashboard and against the quote in admin section.
Step 4: Acceptance of quote
If the store owners has decided on the price then they can approve the quote. And the notification will go to the customer. Store owner can also send the checkout link to customer or it can be made available to customer in their Dashboard after approval.
Store owner can also decline the quote if the result of negotiation is not in favour.
Until the admin has approved the quote the customer cannot convert the quote to order.
Step 5: Order creation and handling
Customer can convert quote to order after approval or the store owner can make order for customer from quote and send the payment link to the customer.
Step 6: Payment
The last step would be the payment for the order. Thus completing the cycle.
This process provides the structured approach on how an enquiry can be converted to an order.