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October 20, 2020 | Authored by: Roy Barak

Your customers are not lemons: The end of the discriminatory pricing model – a focus on long-term strategies

We are entering a new era of pricing.

Price discrimination is a key pillar in what they teach economists as part of Pricing Theory classes at school, but this is an antiquated approach when it come to the new world of subscription businesses. In short, this approach pushes vendors to get as much money from each and every customer, charging them different prices for the exact same services. It was the art of “squeezing the lemon a little more each time.” It worked, particularly for the likes of United and Booking.com. But we are entering a new era, an era where options are not going to be based on only segmentation — or guessing. With price discrimination, the company looking to make the sale identified different market segments, with different price elasticities. Markets were kept separate by time, physical distance, and nature of use. It was overly complicated and based on facets that could not sustain a long-term strategy.

But, as I said, this did work for many companies. And, while it did work for many years there is a new solution that I would like to talk about. One where profiling is combined with smart intelligence. One where you don’t just focus on short term revenue but at actual data that illustrates a picture and gives recommendations for the future — a long term strategy that has the goal of maximizing revenue and building relationships that last. I am proud to announce that Vindicia has launched MarketONE — a solution that makes this all possible.

As a CFO, I often struggle with the tradeoffs of short-term financial results and long-term financials, backlog and stability. It’s not simply about making a decision based on a moment. This year, which has been defined by uncharted challenging times, has allowed us to place more emphasis on fundamentals such as customer lifetime value. With MarketONE, we use our expertise and industry-leading data to help you pinpoint the long-term customer. It is a solution that gives you a smarter way to connect with your subscribers and execute an engagement plan that makes sense for each customer rather than how the above old-school model is outlined. We want you to build actual tailored relationships with your customers that will keep them coming back for more.

It’s visionary. That’s a large statement, I know. Yet, what worked in the past is not always what will work in the future. In our industry, we need to adapt and adapt fast to ensure that our long-term strategy and revenue plan is relevant. Today, Vindicia’s MarketONE, the all-in-one subscription platform, is accelerating growth with next-generation subscription models and forging lasting customer relationships. Let’s face it, subscriptions are a complex business model. And, that’s why you need the MarketONE platform. By seamlessly uniting and simplifying subscription processes, MarketONE streamlines recurring transactions, subscription bundling, and the end-user journey. You can now deliver the value and experience that your subscribers expect – while gaining the flexibility to explore what’s next and find what works best for your business.

With MarketONE, you can zoom in on what matters most, taking the guesswork out of your business, ensuring a revenue plan that makes sense for your customer base. With Vindicia you can:

  • Conquer new markets and stay ahead of the competition
  • Go global faster by building a vast network of partnerships
  • Expand your reach with smart bundling
  • Improve every user journey
  • Use subscription intelligence to guide your business

Your customers are not lemons – let’s do things that make sense.

In 2021, I ask you to think beyond revenues and focus on also creating meaningful experiences and building long-term relationships with your customers by bringing an added value that gives you a memorable competitive edge.

About Author

Roy Barak

Roy Barak is Chief Financial Officer and Chief Operating Officer at Vindicia. With over a decade of experience in the financial planning and analysis aspects of the IT and telecommunication industries, Roy brings extensive expertise in pricing models, financial modeling, and working with senior management to transform existing business lines and generating new ones. Previously, Roy worked at Amdocs, Vindicia’s parent company. Here he held key financial positions that supported the establishment of an internal accelerator, which introduced half a dozen successful new offerings. Roy also worked with the Amdocs services sales arm in transforming commercial and pricing models.