Data-driven optimisation of proposition & price for SEAT after sales
SEAT Netherlands’ question: in the price-sensitive car maintenance market, how do we ensure market share and margin growth? Flowresulting (part of THoM) advised to explore the possibilities of value-based pricing. Onno Struif Bontkes is the service & after sales manager . He chose Flowresulting because “Flowresulting not only provides a report with insights but also concrete advice that we can apply immediately. Their approach has immediate business value for us”.
Key word in value-based pricing is “willingness to pay”
Key word in value-based pricing is “willingness to pay”: how much value does a customer assign to different parts of the proposition, and what is he willing to pay for this?
“The project showed which elements are most important in the customer’s choice process. Based on the advice, we adjusted the focus in marketing communications and focused entirely on warranty, in addition to price.” Struif Bontkes
One of the insights from flowresulting’s research was that a large proportion of SEAT drivers thought they ‘only’ received a 12-month warranty (or less) on maintenance. While in practice SEAT gives a 24-month warranty.
Benefits of Price Research
One of the ‘side benefits’ of price research is in many cases identifying ‘gaps’ between perception and reality. These help to deploy marketing communications in a much more targeted way. Similarly, price research often provides insights for communications colleagues. SEAT used the results of the research by focusing communication statements much more on customer benefits, rather than functional components of the proposition such as free windscreen repair.
The research results form the basis for a market simulator that is custom-programmed for each project. This allows various scenarios to be calculated. After calculating the business case, SEAT had reason to increase the warranty to 48 months.
“The research made it clear which pricing is optimal per customer group, and we adjusted the prices accordingly. In one customer group there was room for an increase, while in the other group a lower price meant we could win considerably more customers. Thanks to more intelligent pricing, our market share has grown and our returns have improved”.
Onno Struif Bontkes
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