Alleviating Customer Worry with Innovative Pricing Models

April 14, 2025

When consumer sentiment fell for its third straight month in March, it hit the lowest level since November of 2022. It’s no wonder. Stubborn inflation, rumors of a recession and now potentially sweeping impact from tariffs have consumers spooked about spending. 

Much of consumers’ hesitation is rooted in worry about what’s ahead. The University of Michigan's Consumer Sentiment Index report put it best: “Consumers continue to worry about the potential for pain amid ongoing economic policy developments.”

 

Consumers change spending to prepare for hard times

Interesting consumer behaviors have started to take shape as people find creative ways to afford both necessities and even little luxuries. A recent BuzzFeed round up provided a peek into some of these choices:

Rotating subscriptions: Rather than subscribing to all the streaming services at once, some are paying for one service at a time. They watch everything they want to see on one platform, cancel that subscription and move on to the next.  

DIY alternatives: Some people have started doing their own nails, cutting their own hair and even making salad dressing at home. The upside to this strategy is that people gain new skills while saving money. 

Reevaluating necessities: Others have found themselves able to live without things they formerly considered essential, like driving to work when a bike works just as well or drinking soda when water from the tap is free. 

While choices like these certainly reflect responsible spending, they also hint at a broader shift — one with real implications for the businesses that provide things consumers are trying to live without.

 

Rethinking pricing to reassure consumers of value

With so much financial anxiety afoot, pricing can become one of the most powerful brand levers a business can pull. By aligning pricing strategies with customers’ shifting priorities, businesses can reassure customers that every dollar spent with them is a dollar well spent.

It’s important to consider that simply reducing prices is not always the play. Several other strategies may be a better fit depending on a business’s imperatives. Here are a few to consider. 

Introduce tiers or bundles. Giving customers options is nearly always a good thing. Creating multiple price points through tiers or packaging together multiple offerings introduces choice into the customer experience, giving budget-conscious customers a greater sense of control over their spending. It may even bring about higher spend from customers willing to pay more to get more.

Add new payment options. Offering installment plans, subscriptions or pay-as-you-go models can be an effective way to make doing business with a particular brand preferable to another. An additional benefit to this strategy is that the business doesn’t necessarily need to trim prices, which maintains the stability of existing margins without losing revenue from a recession-wary marketplace.

Institute values-based pricing. Rather than set prices based on costs or what their competition has decided to do, businesses that implement this strategy charge based on the value of their particular product to their particular customers. Not for the faint of heart, nor for a temporary fix, instituting values-based pricing requires deep customer research and segmentation. But it may be just the thing to establish a brand’s products as the premier choice in the market. 

The consumers who are trimming subscriptions, embracing DIY and rethinking what’s essential may be sending up a flare. Businesses would do well to respond. Those that do so with thoughtful, agile pricing strategies will build the kind of trust that keeps customers coming back long after the financial anxieties of the day fade.

Reach out to Bank Iowa’s Treasury Management team to help your business brainstorm ideas for innovative pricing, payments and other models.