Leveraging Dynamic Pricing Strategy to Drive Sales

Dynamic pricing, is one of the effective strategies which online businesses are leveraging to drive customer acquisition. Dynamic pricing is often observed in Airline, Hospitality and Ecommerce industry.

So let’s understanding what is dynamic pricing and how brands are leveraging it

What is Dynamic Pricing?

Dynamic pricing is a pricing tactic which changes dynamically on the website based on the users engagement with the website and the probability of them converting.

This technique has been tried and tested in multiple industries and has proven effective to drive acquisition.

Advantages of Dynamic Pricing?

Improves Conversion Rates 

Dynamic pricing allows brands to improve customer rates, as the dynamic pricing is based on different logics, brands can offer different pricing based on the number of times the customer has visited the product page, time spent on the website, interactions happening on the page and if the customer has move in the customer

Maximise Sales  

As dynamic pricing changes dynamically based on user behaviour the sales improve, for eg: When you try to book a flight from A location to B destination, let’s say you see the price is $100 and later when you visit the same flight, you would see that the flight price has increased to $105 or by some percent, so here the customer feels that if the price goes beyond $105 or whatever the new price is, it would be quite expensive, so the customer ends up booking the ticket

Examples of Dynamic Pricing 

Here is an example of Flipkart, when I visited this product page, I saw the furniture prices as Rs, 26,499 ($341). I spend around 3 minutes reading the content including the features, offers, reviews and more on the page, and I exited the website.

Dynamic Pricing

After 3 days I resisted the same product page and I found the pricing to be different as below Rs. 23,849 ($207)

Dynamic Pricing Strategy

As I had spend decent time on the page when I had first visited, plus I resisted the page after 3 day, Flipkart showed me a lower pricing, because the data signals learnt that I am seriously interested in the product and if I see a lower pricing I might end up buying the product.

So this how Flipkart, Amazon and other online businesses reduce or increase the price to drive action on their website.

How to define Dynamic Pricing? 

So what are the different way or different scenarios in which you can define your dynamic pricing strategy

There are different scenarios in which you can define dynamic pricing strategy which are as below

Dynamic Pricing Strategy


Dynamic pricing should definitely be implemented if you are an Ecommerce, Airlines or a Hospitality Business. SAAS companies also try to push different pricing if they observe that you have tried their product (during free trial) and have effectively used. Dynamic pricing will help to improve conversion rate and also drive sales and an automated level.

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