Applying CRM in Information Product Pricing

Since information products have unique cost structure and characteristics, namely, high fixed cost and low variable cost, the traditional pricing strategy based on marginal cost theory can not be applied by the producers. This paper indicates a new principle of pricing--customer value (CV) principle. Based on the principle, the producers can execute a number of different pricing strategies to maximize the CV in order to gain business profit. In this article, we focus on the capability of CRM (Customer Relationship Management) in this domain. CRM can help evaluate buyers, customize products and manage lock-in effects to implement CV. We first present an economic approach to analyze the market structure and pricing strategies, and then illustrate the CRM application models in the two pricing strategies which are based on Pigou’s price discrimination framework. Finally, the conclusion indicates that CRM application in the information products pricing can benefit both customers and producers.