Relationship pricing is a fee structure that offers existing customers discounted prices on ancillary products, deepening ties and increasing loyalty. Banks, teleconferencing companies, and other businesses use this approach to broaden their suite of services and generate profit while offering customers a unique shopping experience.
Also known as relationship-based pricing or RBP, relationship pricing is a type of fee structure that is extended to existing customers who choose to purchase goods or services that are ancillary to the basic products offered by a business or company. The idea behind this type of pricing is to allow the company to deepen ties with existing customers by offering them more of the products they want, at highly competitive prices in the market. Doing so helps increase customer loyalty and improve the revenue stream generated by the business.
A simple example of relationship pricing can be found in the banking industry. Along with the core checking and savings account products, most banks today will also offer customers the opportunity to purchase insurance or purchase stocks and bonds through specialized departments within the institution. Some banks will also operate a real estate division that gives existing bank customers the ability to finance a mortgage at a lower rate, based on that existing business relationship. Using this approach minimizes the chances that the bank’s customer will look elsewhere to manage their financial transactions, as the expanding range of services meets those needs and enables a unique shopping experience for customers.
The concept of relationship pricing is also used in other settings, such as business service offerings. A teleconferencing company can offer its teleconferencing clientele easy access to videoconferencing, fax and email services, or even discounted long distance rates through a number of provider partners. This relationship pricing approach allows the company to broaden the suite of services that generate profit for the business while also strengthening ties with its customer base. The ability to offer a broader range of services is also useful in sales and marketing efforts aimed at attracting new customers.
For consumers, the benefits of relationship pricing often center on the ability to secure goods and services at prices that may be difficult to lock in elsewhere. At the same time, the convenience of the approach is often a key factor. For example, a bank customer will often receive a single monthly statement detailing activity on all of their accounts, rather than a series of statements from multiple providers. The online banking process is often simplified, making it possible to move money to or from one investment account to any of the other accounts, pay the mortgage with a transfer from a checking account, or any other combination of transactions involving the accounts for that customer.
Smart Asset.
Protect your devices with Threat Protection by NordVPN