We introduced you to the broad intent of the CTSI Guide to Pricing (the Guide) recently but it is too much of a fundamental change to cover in 500 words. Here we go into a bit more depth, although we’ll limit ourselves to practical advice. You must read the Guidance to understand its full provisions.
There is a legal requirement that you must not use pricing procedures in a way that will mislead the public. The point of the Guide is to provide advice and guidance on procedures. Of itself it is not law but if you fail to comply it can be used to assist regulatory bodies as to whether an offence has been committed and its severity.
The Guide puts great emphasis on the manner in which the price is calculated, the nature of the price advantage and misleading omissions. All are interlinked of course but we will deal with due diligence, which is the major change in format from previous guides.
There are no hard and fast rules due to the variation in circumstances of particular products and markets and although this might be uncomfortable for those considering a new pricing strategy in an email marketing campaign, it is also liberating. If you can prove it is fair then it is allowed.
You are obliged to act professionally and responsibly in coming up with your pricing strategy. It would not to true to suggest that if you acted in good faith you are in the clear. However, being wrong after careful consideration is different, in the eyes of the regulators, to a deliberate attempt to mislead.
You need to establish systems to ensure, as far as possible, that your policies are fair. You can’t copy another company’s pricing policy. For email marketing specifically, regulators will be on the lookout for:
1/ How you communicate your price to your subscribers,
2/ What terms and conditions were included in the actual price of the product, and how these were made obvious,
3/ Stock availability for the promotion and during previous ones,
4/ How you justify your claim in the circumstances of a price comparison with a competitor’s product.
If your pricing policy is challenged then you are going to have to support the four points above, showing the systems for checking each individual point. It will not be enough for you to merely show the price in previous email marketing campaigns. That would be too simple.
All prices for the product, and methods of display, would need to be listed. If there was a sticky label, one placed over another, a 50% off offer, your website pricing – I assume you are getting the picture. This goes for all platforms: radio, posters, social media, electronic media, apps and more. In fact, probably much more. Terms and conditions need to be recorded even if, perhaps especially if, they were identical.
And then you have to show that you had considered all of them before coming to your decision using the records of your processes. It seems a lot of work, but if you set up systems to record such things, then refer to them, and record proof, you will be in the clear.