Pricing transparency and innovative pricing models: Driving customer trust and retention in SMEs
Year: 2025
Type: article
Abstract: This study examines how pricing transparency and innovative pricing models, such as subscription-based and freemium approaches, foster customer trust, acquisition, and retention among Small and Medium-sized Enterprises (SMEs) in Nigeria. Conducted in Lagos, the research employed a mixed-methods design, surveying 175 SMEs across manufacturing, retail, services, technology, and healthcare sectors, and interviewing 15 SME owners. The scope assessed the impact of transparent pricing on trust, the effectiveness of innovative models, and strategies for building long-term customer relationships. Results show that 65% of SMEs rated pricing transparency as highly impactful on customer trust (mean rating 4.3), particularly in retail and services (4.5). Subscription models, adopted by 40% of SMEs, and freemium models, used by 25%, were rated very positive for acquisition and retention (means 4.2 and 4.0, respectively), with technology SMEs leading adoption (60%). Combining transparency with innovative models (55% of SMEs) yielded the highest retention (mean 4.4). Interviews highlighted that transparency reduces customer skepticism, while innovative models attract diverse customers. The study concludes that transparent and innovative pricing enhances trust and loyalty, strengthening SME competitiveness in Nigeria’s volatile market. These findings guide SME owners to adopt clear pricing and flexible models and urge policymakers to support training for digital pricing tools, contributing to SME sustainability and economic growth.
Authors: Obiajulu, Chinonso Benjamin, Azubuko, Chidimma Francisca, Esemokhai, John Balogun
Institutions: Ahmadu Bello University, Nigerian Defence Academy
Language: English
Subfield: Marketing
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W7108343590
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