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Digital Bank

What was the problem?

A digital bank was expanding further into the European market, and its major concern was its pricing. It was the oldest pricing question in the book - are we optimally pricing our product, and if not, will increasing our prices impact customer demand? (Side note: it is almost always better to over-price than under-price. But that’s for another time).

What did we do?

01

Market Research

We began this project at a universally good starting point - the beginning. The company’s historical data along with the industry information provided us with a wealth of insights into the target personas, product offerings, market shares, user demographics, and product usage behaviour.

02

Narrowing Down

Our goal was to create maximum impact on the bottom line with minimal pricing changes. By the time we began this project, the customer base was wide. This meant that major pricing changes would lead to a loss of customer base.

When we think pricing, we typically think macro - how will my customer pay me a fair price for my product? The market research showed us that’s not going to work. We had to go micro instead.

We focussed on improving the monetisation of existing offerings within each product, essentially asking for fair value on specific benefits instead of the entire product.

03

Process of Improving Monetisation

We analysed the monetisation opportunities in three segments - based on market segmentation, product features, and top revenue lines of different offerings. 

 

In market segmentation-based opportunities, we strategised dynamic pricing for different geographical areas of Europe, based on the price elasticity of each offering within the product and user behaviour and preference.

 

In product-based opportunities, we identified opportunities for increased paid features and ancillary services within the product.

 

Finally, in top revenue line-based opportunities, we mapped maximum revenue-generating offerings within each product and mapped them to the product that had the most number of customers. This allowed us to determine the areas where acquisition and promotion should be a priority to increase the customer base vs. the areas where price increases would lead to higher revenue without eroding the customer base.

Results

>20%

YoY increase in the volume of transactions.

70%

Growth in gross profit margin.

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