Clever vs simple – when it comes to pricing, which is best?

No two ways about it – pricing is important, whether it’s product pricing or service pricing. But when it comes to your own pricing system, how you go about it is vital. Do you go simple, always aiming for the keenest pricing to keep you competitive in this internet age of constant price comparison, or do you opt for automatic pricing which fluctuates based on certain criteria?

When it comes to pricing, which is better – complex or simple?

How does automatic pricing work?

UT400, our latest cloud-based inventory and order management system for merchant businesses, has some great automatic pricing tools built into it, meaning you can vary pricing depending on who the customer is, the quantity ordered, delivery type and so on. It allows a flexible approach that enables bulk discounting, regular order incentives and risk-management for irregular, low value or slow paying clients. You can apply whichever parameters you require and the system will work to those settings, so if there’s a discount in place for a particular customer, you’re not reliant on a particular person remembering to apply it, which minimises mistakes and optimises customer service.

What are the drawbacks?

The most obvious drawback is that it’s – well – not simple. People often like to know exactly what they’re getting up front. Modern life comes with a general cynicism about complicated pricing – in short, people tend to assume they’re going to be ripped off, and that complicated pricing structures are in place to mask hidden fees. It’s harder to advertise a lead price on a specific product if that price is only accessible to customers over a certain value; and charging higher prices than you’re advertising rarely leaves customers feeling good about the transaction. So while automatic, flexible pricing can work brilliantly with your best customers, who like to feel they’re being rewarded for their loyalty, it could potentially put off new or private customers.

Why might simple pricing work better?

With simple pricing, what you see is what you get, and these days many businesses opt for the KISS (keep it simple, stupid) approach. There’s an argument to say that, given the price-conscious culture we operate in, simple pricing is best, allowing customers to compare like with like in a very straightforward way to know what the best offer is. That will benefit some customers, but potentially not all. It probably means less margin for error, and your advertised pricing will reflect the prices customers actually pay, so from a service perspective it can be preferable. It could depend on whether your business is more focused on trade customers than private individuals – but there are pros and cons of both systems.

Which is right for you?

As a software system designed specifically for merchant businesses, UT400 can happily cope with either system – or even a combination of the two. For example, you could have all customers up to a certain value paying a set, simple price, with premium customers (based on frequency or volume of orders, perhaps) being eligible for a more flexible system; or have a trade pricing system and a public pricing system. Whatever you decide, UT400 can handle it and show you exactly what’s happening in the business in real time, on any device. It comes down to which is best for sales, and the bottom line, in your individual business.

The information you need to make the right decisions – at your fingertips

So, how do you choose?

Again, we’re here to help. We can assist with testing and measuring either approach, or both, so that you can work out what is best for your business and your customers. We’ve worked with enough builders’ merchants over the years to know that what works for one won’t always work for another, and that customers can be fickle. That’s why we have developed software specifically for your business type, which lets you make those decisions yourself; because no-one knows your business like you do. But we can help you to ask the right questions, and the software will give you the analysis and insights you need, in a straightforward and no-nonsense way, that lets you get right to the answers you need to make those decisions.

Business is rarely simple, and there are always numerous factors at play. Our merchant business software is designed to help you make sense of those factors, so you have the information you need readily available to help you make the best decisions, faster.

If you’d be interested in a chat to find out more, or a system demo, please drop us a line at or call us on 01202 861606.

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