finance
Dynamic Pricing
Adjusting prices in real time based on demand, segment, or context.
Definition
Dynamic pricing changes the price based on conditions: demand (surge pricing), customer segment (enterprise vs SMB), time (off-peak), or willingness to pay. Used aggressively by airlines, hotels, and rideshare; under-used in service businesses where every customer pays the same. Service businesses can apply lightweight dynamic pricing through: tiered packages (good/better/best), customer segments (startup rate vs enterprise rate), and rush/timeline fees. The goal is to capture more of the value you deliver across different customer types.
In your business
- →Start with 3 tiered packages, not custom-per-customer pricing
- →Charge a rush fee for accelerated timelines - 25-50% premium is standard
- →Segment pricing by customer size, not by what they ask for