The Power of Customer Experience in Pricing

In this episode of Live with The Pricing Lady, I sit down with

Ghislane Arifine and we talk all about customer experience and how it

relates to pricing in your business.

Sit back, relax and enjoy the episode.

Hello and welcome to Live with The Pricing Lady.

I'm Janene Liston, your hostess.

Today, I am so excited to have a very special guest with us here.

Her name is Ghizlane Arifine.

Welcome, Ghizlane.

Thank you, Janene.

Thanks for having me.

This is new for our listeners.

Before I get into our rapid fire questions, I just

want to set the tone here.

In 2024, we are going to be having themes each month.

This month, we are starting with the topic of the customer.

Now, if you follow me, you know, I am always saying pricing is rooted in a

deep understanding of the customer.

That's where price setting starts or understanding what prices to have starts.

That's why I wanted to bring Ghizlane here today with us because she is an

expert in the customer experience.

But she'll tell us more about that in a moment.

I wanted to set the stage for our conversation today.

So Ghizlane, why don't we go ahead and start by where are

you joining us from today?

I'm from Zurich, Switzerland.

Excellent.

And what would you describe as your superpower?

What I would describe as my superpower, I think it's being multi

passionate person, so I'm passionate.

Many different things.

So basically I love customer experience.

As you can see, I'm into technology.

I'm into art.

I think it's a super power because it gives me the possibility to

address challenges, problems in life from different angles, in different

ways, and with a lot of creativity.

Oh, I love that.

Excellent.

I'm also a person who has a lot of different hobbies and things I

enjoy and it makes life exciting.

That's for sure.

What's one thing you'd like to share with us that most people don't know about you?

Oh, I think what most people don't know about me is that I studied fashion design.

It was a long time ago.

When I was a teenager, so I was in high school and my mom enrolled me

in that school of fashion design, which is offering evening classes.

I think she wanted to keep me busy in the evenings after school,

but I think it was very useful.

I could express my creativity and I'm still, it's still a hobby for me.

I love actually customizing and styling outfits for me and for my friends.

Oh, that's excellent.

It's so funny how we can have so many different facets, isn't it?

Why don't you share with us about what you do and how you

came to start your business?

Yeah.

I always worked actually in corporate in academia.

I always had this I had a dual career as lecturer but also as a researcher and

customer experiencing UX user experience, worked for couple of companies the

last year more big corporations and i always had a freelance site where

I did some projects here and there.

And I'm basically doing the same thing this year.

The only difference is that I'm working with my sister who is,

probably she's watching me now.

She's a digital marketing expert.

And we had a couple of conversations this year.

We realized that we can create synergies in our services.

Me bringing the customer experience, she's bringing the digital marketing.

We decided to join forces.

We want to actually bring those areas together in order to offer to businesses,

small businesses, solopreneurs, this knowledge and tools on how they

can enhance, they optimize their customer experience and use this area,

leveraging it to design and implement successful marketing strategies.

Wow, that's amazing.

I mean, yeah, as someone who just,

I appreciate businesses who are so customer centric and focused.

You know, this like tugs up my heartstrings to hear about

what you guys are doing.

So, , I love it.

I love it.

It takes a lot of time though to an effort to educate small

businesses to be customer centered.

The difference between us, what we are doing and between when with a classic

and traditional digital marketing consultancy or agency is that we will

be delivering marketing content, but making sure that it's consistent, will

align on the messaging, on the branding throughout the customer journey and

across all the channels basically that the customer will be using.

Okay.

Super interesting.

I'm sure, you guys are going to really enjoy this conversation.

Why don't we start by talking about what is customer or user experience?

What are we talking about here?

Customer experience or user experience.

We talk about the customer because this is the person who purchases

the product or the service and user is the one who is using, sometimes

they're not the same people, right?

And they have different journeys, you know, to define customer experience.

It's simply the sum of interactions that a customer would have with a

company business throughout the journey.

So we're talking about the phase of discovery, contacting

the company to understand what the, what they're offering.

I'm searching for information to the purchase process where I

would make the decision to buy.

And going through the post purchase, which is more about the usage of the

service of the product and goes beyond that to probably loyalty, advocacy, I

would recommend, etc. And this is true.

All the channels that business would be using.

So we're talking about website interaction on the phone, apps.

We're talking about store.

If it's a retail business, The idea of customer experience management

is that we make the journey or the experience as seamless as possible.

As employable as possible because we know positive experiences lead

to repeat purchase, to loyalty and definitely to financial outcomes,

to positive financial outcomes.

Thank you so much for bringing up that difference between customer and user.

It's one that a lot of people don't necessarily, take the

time to think about that.

There's often a difference between who's going to be using your

product, service, or software and the person who's making the purchase.

And a lot of businesses there, those can be two different people.

Exactly, exactly.

And they're both important.

Yes, they are both important.

In a pricing context, we're usually focused on the customer, the

person who's making the purchase.

Absolutely.

And I think the pricing anyway is something that is relevant from

the beginning of the journey to the end, because we talked before

about the purchase decision and the pricing as a factor is a big factor.

And after the purchase, we talk about the value for money.

So we talk about what do you get for the price you're paying?

Yeah, absolutely.

How in your experience or in your observations does customer

experience, assuming that it does, how does it impact value perception?

Probably I would like to clarify the value perception because I

think there's a lot of confusion.

People understand it in different ways.

Value perception is something that the customer estimates.

I am estimating if the service I'm receiving worth

the price I am paying, right?

This is all about the perceived value.

Now the thing with the value is that it's a lot of components in it.

It could be that I am thinking of the functional value, the product

is solving a problem for me, right?

This is a solution.

So it's, I can think of the emotional value it creates for me.

Notions.

I love using this product.

You can think of Apple, for example, of Tesla, and we can

talk also about social value.

There are many, many dimensions of value.

Basically, this is where the product would be helping you to belong to a

community or to have a status, right?

All these factors would create the overall perceived value

that the customer would build.

And it's very subjective.

Right?

So when we relate it now to the customer experience.

The way you're perceiving or estimating this value is based on how you

experience the product and the service.

It can be, what means experiencing means probably the quality of the interaction.

If you're going to an online retailer, you want to buy, I don't know,

product on the eShop and you have very seamless user friendly website.

You don't have frictions in your purchase process.

So this is a great customer experience and definitely will associate a

higher value to the to the product itself and to the brand overall.

The same if you have, let's say you buy a product and you have a problem

with it and you call the company and they're solving immediately the problem.

This is something that creates a positive experience because it

goes beyond the product, right?

Personalization.

There are many, many areas that would create this positive

experience will impact the way you're perceiving the value.

Basically good experiences will lead to higher perceived value.

Correct.

So I'm, I'm curious about one thing.

Because recently I've been, you know, doing a lot of research.

I have an episode coming out next week on pricing trends and whatever.

And one of the things I was looking at was, what is happening

in terms of what customers want.

And what I saw repeatedly in many places is people are, you know, in

part, because people are in a sense, they have less money to spend,

but things are more expensive.

So they're buying fewer things or being more discerning with their

purchases that the personal experience.

is actually becoming more important as we go into this year.

Absolutely.

When you have like a personalized experience and pretty, an outstanding

one, it will justify premium price.

So why?

Because people associate the price they're paying to tangible elements, so

to the product or the service itself, but also intangible factors like trusting

the company, just liking the brand.

I like the brand and they would be willing to pay for it.

Even sometimes The service fails or when you have issues, they're more willing to

even forgive the company because they are very much loyal and they would justify

this premium prices that they're paying.

Okay.

Okay.

Yeah.

I mean, it's something that I've seen more and more myself.

But I have to say it was something a lot of people from what I was

reading online or really leaning into this year or think is going to be

even more important going forward.

That's makes this conversation even that much more important.

What are the risks for small businesses when it comes to this

topic of customer experience?

Many, many risks for small businesses because the point with small businesses

is that they need to be agile.

As a small business, you need to go through such a journey, changing your

business models, changing pricing models, and you need to navigate

this and along the way, you need to be able still to deliver to the

customer and meet the expectations.

It makes it very, very challenging.

So in terms of pricing, I would think of.

If a small business doesn't consider the target audience and

what they value, definitely you create a mismatch of pricing.

For example you would have either too high price for the customer.

The customer would perceive basically your product as overpriced.

This is too expensive for what it is.

And with all the information we have available, it's very easy

that the customer is running away and going somewhere else, right?

Or you underprice.

And it goes too low that the customer would be skeptical because you think

this is so too cheap for what it is.

So, that must be some problem with your site.

This is the mind of the customer actually.

The standard customer would always associate the quality to the price.

So if it's high, I mean, high price means it's good quality.

If it's low price means maybe it's too low.

It's a bit tricky, you know?

It's strange.

Yeah.

So this big, big challenge, I think for, for solar project.

Yeah, sorry.

I think it, it's funny that you say that because on the one hand, most people

when it comes to pricing their offer, you know, they have this mentality,

the lowest price already always wins.

It's kind of sitting in the back of their head.

Yeah.

And yet at the same time, they will turn their nose at something that's too

cheap and seems too good to be true.

So , you know, it's, it's kind of a funny, a funny, what do you wanna call it?

Like those two concepts or, or thought processes are at

odds with each other, right.

I think that's really important.

No, it's not true.

The lowest price does not usually win.

It depends on the market.

If you're in a market where the value that the customer is looking for is

the lowest price, then it's different.

Right.

Yeah.

The other thing I think it would be remiss not to mention here, at least in my

experience is that one of the big risks is that you develop the wrong solution.

Absolutely.

Yes.

I think sometimes also, if we talk about the pricing, like specifically

really setting up a pricing strategy, what I see most of the time, like the

biggest mistakes, entrepreneurs and small businesses do is that they set up

a pricing from the internal perspective.

They look at the cost.

Okay.

I have a bit of margin and that's fine.

So.

All good.

I have my pricing set there.

The problem is they forget to ask customers how much they are willing

to pay for their service, which needs to happen before the launch, right?

So it's kind of customer research side of things where you be simply

ask customers or potential customers.

Are you willing to pay that price for that service or how much can you

afford for that based on your budget?

So.

Simple questions, which makes actually, your price become a bit more realistic

kind of, if this is not done, it leads to basically overpricing.

And then at the end, you, nobody buys.

And then there is a profitability challenge here.

Right.

Oh, that's a very good point.

So what are the best methods that you find are available to be able to understand?

Customers better for these small businesses.

So from the, as a SIGs professional, so we work with a really a bench of

methodologies, it will depend on the type of the business on the target

audience, what they prefer as methods.

If we take an example of, I mean, the most common one are surveys, right?

We talk a lot about surveys.

There is a lot of debate.

Is it a good methodology?

People cannot answer surveys anymore.

That's too much and so on, but I believe it's used in the right way.

You can get good insights, use the right channel, sending it at the

right time to the right audience.

When the right direction, you can get good insights that helps you actually

understand how they perceive the price and how they perceive the value.

It's basically asking questions, as we said about affordability,

about value for money.

About if they were purchasing again or not, etc. I would think of other

methodologies like interviews.

We would go more into deep dive with a limited number of people.

Solopreneurs, most of the time they use check in sessions.

Make sure you interact with your customers regularly What's happening, really a

session dedicated just for feedback And integrated into journey obviously And I

can think in terms of, if we focus only on pricing insights I always say we need

to look into what the customer thinks and what the customer does because might

think something and do something else.

Right.

That's one of the challenges with pricing.

People, most of the time, don't understand why they, do or don't buy something.

A lot of the purchases that we make are done on a subconscious level.

I always joke with people, why do you use cost to set your prices when it

doesn't matter to the customer and they say, well, what do you mean?

It doesn't matter.

I said, well, when you bought an apple last time, did you stand

there with your calculator open on your phone and calculate how much

it costs the farmer to produce it?

And.

The whole value chain and they were like no!

And I said great!

Cause what it costs them doesn't influence your decision to buy,

you know, or to pay for the Apple.

So, you have to.

Look at things in the right way.

So I think that customers, a lot of time, we don't know why we purchased

this over that until some of us ask some, someone asks us the question.

And even then sometimes it's not real clear, more importantly, until you

actually have to part with your money.

You know, as a person answering the question, it can be difficult to really.

I lost you for a second.

Sorry, Janene.

Okay.

Well, I see you freezing there.

Yeah, no problem.

What I was saying is that, you know, until you have to take your money out

of your pocket and actually part with it, you don't really know if you're

going, what you'd be willing to pay.

You can make a guess, but you don't actually know.

But there are methodologies out there to help get at that.

Absolutely.

I think, you know, better than me, we talk about value based pricing, right?

So a customer wants to know what is the end outcome of something that he buys.

Let's say, a product, I don't know.

I always give examples with e commerce because I like e commerce.

If someone is selling let's say beauty products,

It's very important to educate the customer about the value, explaining

the ingredients, why it's beneficial, what is the outcome of it, because then

it gets clear in the customer's mind.

He knows what to expect and he's willing to pay the price

and there are no bad surprises.

Yeah, this is more like the perception.

Let's say the psyche side of customer, but we have the behavior because at

the end of the day, we want to know if they buy, they don't buy, numbers talk.

So what, what we do in terms of methodology is just back

to your, to your question.

So when you have a large customer database, we work a lot with

models like, I don't know if you're familiar with RFM model.

It's in few words is like you look at how recent your customer has purchased,

what is the volume of the purchase over a period and how frequently he purchases.

So basically it gives you the possibility.

If you do the analytics right, to score these and see what is the

highly valued customers, and you can target them with premium prices.

This is the work of the CX team, for example, or the CX advice.

We would be looking into the behavior of customers, purchase

patterns, highly valued.

We will target them with premium offerings, the ones who didn't buy

since a long time, for example, but they're somehow buying

regularly to a certain extent.

We will target them with discount because it makes more sense to bring them back.

With the bundling opportunities, we would look at the basket.

What are the products they put together more often?

There is a lot that comes from the customer in terms of behavior that you

leverage for your pricing strategies.

Right, right.

Okay.

Before I start wrapping it up, I have one more question for you.

A lot of the people who listen to this show are, say, in the very

early stages of their business.

So let's say if we think of startups, for example,

What are the best or what differences because you're a lot of what you're

talking about is you're talking about looking at historical information, how

people have already behaved over time, but if you're a young business, of

course, you don't have that information.

So what, what should they focus on as a methodology or what would your

recommendation be for someone who's in that startup phase of the business before

they have that information to better understand the customer experience.

Okay.

So if you start a business and you know who is more or less your target audience.

Start with just a bunch of people asking them about their expectations, their

preferences, their needs, et cetera.

And based on that, I know that many solopreneurs and many small businesses,

they work with personas, which are hypothetical because they don't have

resources to do deep market research and gather so much information.

And then really, database personas to work with, that's okay.

You can have hypothetical personas.

This is the persona you think you are serving.

What is important is to validate the personas along the way.

It's a continuous process because people change, your customers

change in terms of needs.

And I always give this advice also in terms of pricing.

When you start with your pricing model, it's not an end point.

The sweet spot is dynamic.

It evolves over time.

I think you know it, but I think we agree on that . Is that you are moving

with feedback mechanism, listening to the market, understanding what your

competitors are doing, what customers are expecting, and adjusting, testing,

you can do AB testing, et cetera.

Until you get to the stable pricing, which will be anyway, slightly

moving and changing over time.

So there is no one fixed point to find the sweet spot between a price that

meets customers expectations and your business requirements at the same time.

Right.

I mean, like you said, it's, it's something

like you base so many things in your business.

If, in my opinion, if you're doing it well, you base so many things off of

the customer, but the customer is always changing and you may choose actually

to shift who the customer is at times, or it may naturally shift as well.

So it's not, again, it's not a one and done thing either.

It's something that you need to keep a finger on the pulse of.

This customer experience and understanding your customers.

You need to keep a finger on a pulse of that, throughout the

full life cycle of your business.

Was just saying the best word to be agile in startups.

So,

okay.

Very good.

So why don't we wrap this up with a couple more questions.

If there's one thing you would like people to remember from our discussion today,

what is it that they should take away?

I think to focus on value based pricing.

So if it's If your question is related to pricing and also be in

the mindset to be flexible and agile.

So I think it's very important to get ready for those changes and always

have this feedback mechanism as I said.

Keeping an eye on what the customer is doing and what they

think both together to adapt along the way, the pricing, basically.

Yeah.

Excellent.

Do you have a book or a tool or something that you would like to

recommend to listeners today to help them in their business journey?

I think like for startups and solopreneurs, I think

of a book of Eric Ries.

It's called The Lean Startup.

I don't know if you know it.

Very good one.

It's back here somewhere.

It must be somewhere behind you.

I find it really interesting because it gives really practical advice,

tips and tricks, to actually build up the business and grow with this

kind of agile approach, resource efficient and, and customer centered.

So this is very important and he's bringing these three elements in

the book and it's really good.

Yeah.

Yeah.

And last question, if people would like to find out more about working

with you and what you do at Experience Metrics, where should they reach out?

I think they can follow me on Instagram.

It's @experience_metrics with S. And yeah, so I am available.

I am looking forward to follow up on the conversations with them.

Super, super.

This has been really wonderful, Ghizlane.

I absolutely love this conversation and it's right on target, as I said,

with our topic of the month, which is understanding our customers.

The customer is so important, not just to pricing, but to building

a business and growing a business, whatever your business is.

So thank you so much for joining us here today to share your wisdom.

Thanks to you Janene for having me today.

Have a good day.

And dear listeners and watchers, if you're watching us live, thank

you so much for joining us today.

Before we go, I'd like to let you know that I have my Fair

Price Formula course coming up.

The next cohort starts at the end of January and you can get all the details

at thepricinglady.com/setmyprices 'cause that's what we do in the course.

I wish you all the best.

Everyone have a great day and as always, enjoy pricing.