Résumé
Financial institutions are exploring the use of willingness to pay and the resulting market segmentation to increase the granularity of their pricing and maximize profits. In lending, however, most financial institutions lack structured guidelines and models to consistently optimize the pricing of their products to exploit customers' willingness to pay and to fit changing market conditions. This article describes a structured approach to the design and implementation of value-based pricing in lending. Value-based pricing makes it possible to reduce the role of "gut feel" in market adjustments implemented by relationship managers yet keeps the pricing process simple. There are four steps: 1. Identify factors that influence customers' willingness to pay. 2. Define price segments. 3. Quantify your ability to optimize pricing. 4. Implement value-based pricing. Banks that set optimal rate levels based on customers' willingness to pay and receptivity to price increases can better retain profitable customers and move unprofitable customers toward profitability.