There are a lot of things that go through an Ecommerce site owner’s mind when their products aren’t selling and conversions are low. Is it perhaps the design of the site, are buyers turned off by low resolution images or inaccurate product descriptions? And then there’s always the subject matter that not a lot of site owners want to address; are my prices too high? No store, online or offline ever wants to lower prices as a result of low sales and slow performance.
To some, lowering the prices can show desperation and doing so might devalue the site and its products as well as cut into the already tight profit margin. On the other hand, there are also those that believe it’s a great incentive that’ll actually encourage visitors to become actual shoppers and customers.
In reality, customers don’t necessarily look at the price of your products; they look at whether or not they’re getting a great deal (even if that potentially means paying premium). So it’s not the question of whether your prices are too high or not low enough, but rather “How can I make my prices look like the better deal?”
Here are 5 pricing strategies you can apply to your Ecommerce that can make your products more appealing to customers without having to continually lower your prices.
The initial price that your customer first comes across would be considered the anchor price because that’s the price that’s going to stick in their mind and it’s the price that they’re going to base all other prices on when it comes to that specific product. The key to this pricing strategy is to set the anchor high. When you all of a sudden set a “sale” price, which in reality is your normal price, for that item, customers will believe they are getting a deal on the “discounted” item. You’ll find that many online retail stores use this method because it’s very effective.
This strategy calls for deeply discounting specific popular selling items for a (short) period of time. You really have to know the trends of when certain products become hot purchases for shoppers. This will make your promotional pricing even more effective, plus there’s no real sense in lowering a price on an item that no one wants to buy in the first place.
Customers want choices and when you present them with similar options of a single product, then they’ll be able to make a more informed decision on a purchase based on the context of what’s presented in front of them; hence contextual pricing. Provide three similar items with prices relatively close to one another. Your customers will never know how good a deal they’re getting unless you give them something to compare it to.
The one you want your customers to purchase should be placed in the middle of the two alternatives with something stating that it’s the best deal of the three.
This is a little bit like contextual pricing, but instead of three fairly similar products with the same level of quality, you want to offer your customers your product along with a less desirable version of the item that they want to purchase. The less desirable option is obviously the “decoy” and therefore will have you customers turning their attention to your intended product of choice.
This is a form of individualized pricing which gives you an opportunity to reward loyal customers and return shoppers with a specially tailored price just for them. This type of pricing strategy is also a great incentive for shoppers to keep coming back to your store where they’re pretty much guaranteed a deal as long as they purchase something.