How Tier Pricing is important in B2B Commerce?

What is Tier Pricing?

Tiered pricing is when a business sellers their goods and services to different customers or customer types at different prices.

The customers are basically segmented by checking how big they are, how much can they spend, or how long have they been buying from their businesses.

Setup a Base Price:

It’s known that in B2B Commerce, the listed price is not the actual price the customer will end up paying. So it’s essential to have an alluring yet reasonable base price listed on our web site for the visitors who are not registered to see.

Before contacting the sellers to get a price, most of the B2B marketplace customers will do research and narrow down it to a small list before they start contacting sellers to get a price.

Hence, it’s essential for your B2B business to research what is competitive and to determine the costing for products to set a general price to list on the B2B website.

Segmenting the Customers:

Now, comes the step to create customer tiers or segments. Businesses separate customers into different groups based upon their size, how much are they spending, or how long have they been loyal customers.

After this, each segment or tier is assigned specific pricing for the products. So having the customers put into segments/tiers allows you to control what price each customer is paying and ensures that they are paying the correct amount at the time of checkout.

Decide on Prices & Incentives:

Now, after segmenting your customers, you will have to decide on the prices & incentive that you are going to offer each segment. Instead of having to negotiate on each deal individually with the buyers, you can provide an offer them with the tier pricing.

This surely will in turn help you to track your customers, the profits, and other metrics very easily.  You can also add incentives for each tier such as exclusive deals and special offers when they spend a certain amount based on the segment that they are assigned in.

The customers also much likely want to send in quotations to multiple marketplace sellers for the products that exist or don’t so that they can choose the one that provides with a competitive pricing.

Different Discounts for Different Customer Groups:

Businesses should provide discounts for different customer groups as it plays an important role in increasing and retaining the customer base that they already have or the ones that they are going to acquire.

Here, you can show the price of the product only after a customer logs in thus assisting in acquiring more potential customers.

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