#018: The Global Pricing Dilemma: One Product, Many Markets.
How to Offer Fair Pricing Without Losing Profit or Customer Trust
Happy Saturday fellow Price Crafter!
I used to oversee Foreign Exchange (FX) Pricing for a global bank. One challenge I couldn’t fully resolve before I left was that, in certain markets, we operate with very narrow margins due to:
Highly financially savvy and price-sensitive customers,
Intense competition from both traditional banks and FinTech operators.
This isn't an issue when customers hold just one account in one country.
However, being a global bank, many customers have accounts across multiple regions.
This is where the challenge arose.
Customers are charged different rates for the same product (e.g. buying EUR with USD) depending on which country’s app they use.
Some savvy customers figured this out and exploited the discrepancy by transferring money to the country with the best rate, executing their transaction there, and then moving the funds back to their home account.
This results in some complaints and creates an inconsistent customer experience.
Making FX rates consistent across all markets seemed like an obvious solution, but it’s expensive.
Plus, international customers who could exploit this loophole were in the minority. Unifying rates meant leaving money on the table and sending unintended price-cutting signals to the broader market.
I had a few potential solutions in mind, but I left the bank before they could be implemented.
I thought this problem was behind me—until recently.
The Challenge of Offering a Single Price for Digital Products
As many of you know, my upcoming "Effective Communication Workshop" is priced at $120, with a discount for all newsletter subscribers.
Recently, I received a message from a subscriber in India.
He expressed strong interest in the workshop but mentioned that the price was slightly out of reach: "I am from India, so the price is expensive, but I'm very sure it's worth it."
This brought up a familiar issue: pricing across regions with different purchasing power and potentially different price sensitivity.
It’s difficult to apply a straightforward strategy to address this fairly and elegantly in digital products or online workshops.
A Problem I Understand Personally
Even though I live in a country with a higher pay scale, I resonated deeply with this subscriber’s hesitation.
Since leaving my corporate job, I’ve taken many courses to upskill. Yet, there were courses I couldn’t afford due to my budget constraints - Good quality education doesn’t come cheap.
Moreover, often we find ourselves needing to upskill the most when we are financially strapped. For example, after a job loss or when we’re just out of university on an entry-level salary.
My goal has always been to share knowledge and make it accessible to everyone. But how do I balance that with fairness and sustainability?
Possible Solutions
For someone who is just starting to offer online courses, the simplest solution is to offer scholarships.
Individuals can write to me if their circumstances prevent them from attending a workshop, and I’ll provide access based on need.
Some may ask: How do you prevent people from taking advantage of the offer?
My response is simple—I trust my subscribers. If someone feels the need to freeride, they likely have other unspoken reasons, and I’d rather lean on the side of inclusion.
There were other solutions that I considered and ruled out as they didn't quite fit my circumstances. However, in case you ever find your business in a similar situation, below are a few suggestions:
Acknowledge Regional Pricing Differences
Be open about the fact that pricing differs by region. In my previous job, this would have been a practical approach.
Standardising margins for a small group of international customers didn’t make financial sense. Offering preferential rates to this group could have streamlined their experience and eliminated the need for them to move funds across regions. This approach maintains fairness without disrupting broader market dynamics.
Pay-What-You-Can
Instead of setting a fixed price, allow customers to pay what they can afford within a range.
This model works when you have good volume and can still maintain healthy margins even at the lowest price point.
I’ve seen this work firsthand with a yoga studio in London. They offered a minimum price of £10 per class, but many customers chose to pay more. The result? Their classes were always full.
Localize Your Offerings
This is a common approach used by platforms like Netflix.
While they offer different subscription fees in different regions, they also limit content based on location. This makes it less attractive to subscribe from a region where you’re not physically based, as you lose access to certain content.
If your business allows for localisation, tailoring your offerings by region makes pricing differences less contentious. Customers will see the value in paying more for region-specific content or services.
Have you faced similar pricing challenges in your business?
I’d love to hear how you handled them. Especially in a world where more and more of us are selling digital products online to the world.
How do you find the balance between simplicity and fairness?
Have a great weekend!
Cheers,
Clare
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