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Pricing Consumer Loans
Financially disciplined customers who are internet-savvy often shop around and negotiate for the best rates.
Such customers tend to have a lower default rates and are coveted constituents of any balanced credit portfolio.
While predatory pricing policies can achieve short-term profitability objectives nevertheless, the consequences of adverse selection can quickly wipe out initial gains.
On the other hand, following a loss-leader pricing strategy can work well for achieving top-line growth targets but such losses will have to be recovered elsewhere.
Hence, retail bankers are constantly challenged to perform a balancing act between matching competitor prices and achieving preset profit targets.
Recognizing these challenges, at The Skill Mill, we offer services for designing and implementing pricing strategies using our proprietary ChoicePriceTM framework. Some benefits of our approach are as below:
- Insights for possibly increasing the number of price points on offer
- Risk-reward driven price optimization
- Pricing driven scenario analysis
- Profitability tracking by price points
For more information on our services related to pricing consumer loans, contact us at info@theskillmill.com.
Please take a moment to answer a brief survey question and view responses by other retail bankers from across the world:
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