On This Page
Purpose of functional area #
Role of pricing function is to create a pricing architecture that balances the existing and new customer price levels, and positions the offering on a price that is competitive in the market and delivers adequate return for the business.
Inputs: How it impacts CVM #
- Provides the core pricing architecture within which CVM and Acquisition teams work
- Overall pricing level severely impacts revenue and profitability KPIs
- Ensures that actual price implementation in IT systems meets the requirements specification
- Mistakes in pricing can produce bill shock which results in customer complaints and churn
CVM work related to function #
- Collaborating with pricing team to ensure that pricing architecture supports customer segmentation and that multiple price points are available for trial, customer retention, upselling, premium capabilities, etc.
- Providing feedback on the performance of different price points in the customer base
- Introducing price increases into the customer base
- Introducing temporary price reductions into the customer base
- Validation of CVM offers with the overall pricing architecture
Outputs: How CVM impacts this area #
- Insights on customer preferences inform pricing strategies
- Provides crucial feedback about performance of price points in the customer base
Key handshakes to consider #
For CVM to be effective, it’s crucial that there is close work with the pricing team. A core handshake area is to ensure that CVM is enabled to customize offers based on detailed customer segmentation and behavior analysis.
- Utilizing dynamic and flexible pricing tools for personalized customer offers.
- Balancing discounts and profitability, especially in bundle pricing scenarios.
- Employing price elasticity principles to inform strategic pricing decisions.
Impact of collaboration quality on CVM team results #
HIGH- lack of alignment with Pricing team has drastic negative impact on core CVM KPIs achievement.
