Page 43 - AVN April 2016

Dynamic pricing has been around for a while
but was a common buzzword during
Internext. Do you believe business owners
are still leaving money on the table that
dynamic pricing would recapture?
“Absolutely,” said SegPay’s Beardsley. “Business
owners are leaving lots of money on the table!
Dynamic pricing gives webmasters more flexibility
in offers to their consumers and allows them to run
promotions without hassling their processor. It is also
a great tool for add-on purchases or clip sales.”
More than just a way to geo-target different regions
with different price points, “dynamic pricing has
allowed business owners to create new incentives
for the consumer which absolutely helps recapture
money being left on the table,” explained said Wicks
of Payze. “The fact that you no longer have to charge
a single amount for a monthly subscription and can
create new options makes the consumer experience
that much better.”
At its heart, dynamic pricing is a way to maximize
the monetization of each individual consumer. “At
Vendo we’re leading the industry to discriminate
between shoppers who will give you more money if
you give them a higher price and shoppers who will
spend more with a lower price,” said Arrondo. “The
really interesting thing about dynamic pricing is
that it can effectively eliminate the cost of payment
processing. If someone is paying 12 percent they can
see increases in revenue from dynamic pricing in that
range. We are developing artificial intelligence to do
dynamic pricing. It can’t be done by humans (too
much data, too many calculations to be performed
instantly). We’ve been at it for years, investing
millions of dollars. We’re happy with the results
we’ve achieved so far and are looking forward new
breakthroughs in 2016.”
If anything, it appears adult businesses are trailing
the varied use of dynamic pricing in other more
mainstream markets. “Airlines have been doing
this for many years and have built very specialized
systems to handle pricing fluctuations based on
supply, demand and peak purchase times, as well
as geographical regions,” explained Farber. “Adult
companies have been experimenting with different
forms off dynamic pricing for some time now,
with mixed results; however, dynamic recurring
pricing for subscription services has been extremely
effective in adult and is utilized by hundreds of
Netbilling merchants, selling both content and hard
merchandise as well.”
Business owners should also keep in mind the
potential public relations problems that aggressive
dynamic pricing can cause among experienced
consumers. “Is it leaving money on the table? If your
customer in Los Angeles finds out that, had they been
in Oklahoma City, they could have paid less? Does
it buy loyalty to offer a product for more in largely
densely populated areas?” warned Hyun of Mobius
Payments. “Dynamic pricing is a good marketing tool,
but when it comes down to it, do you have a record
of clients you lose because of this strategy? Yes,
it’s more convenient to offer a service or product in
the customer’s native currency, let’s be clear, that’s
called multicurrency. Dynamic pricing can hinder a
sale decision because the tech-savvy consumer may
attempt to access the same product and payment page
via VPN to change their IP to another country and
they may become upset that the price is significantly
lower due to the region if the merchant is employing
that type of marketing tactic.”
Kluzak of CCBill echoed that sentiment, saying,
“When the offering is digital, with a seemingly
unending inventory of subscriptions or cam time,
we fail to see how this doesn’t just show the buyer
that you are somehow scamming them. Honestly,
does anyone like paying a different airfare than the
person sitting next to them on an airplane? Providing
value for the price is the only real way to have a solid,
long-term and financially viable business offering.
Scamming only hurts us overall and hurts the
business long-term.”
As the adult industry continues to evolve, billing
and payment processing services will remain at the
heart of every monetization strategy. Fortunately, the
industry has a robust set of proven experts to rely on
for strategic advice and a continually upgraded set of
technological tools to overcome all obstacles.
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