According to multiple surveys, up to 60 percent of e-commerce customers regard price as one of the most important factors when making a purchasing decision. With so many competitors on the market, how do you adopt a viable pricing strategy to attract customers and boost your sales? There are specialized tools like a price intelligence platform that can help you with price optimization. And here is a brief compilation of the best pricing practices:
1. Dynamic Pricing
Price-sensitive customers can find their best deal within minutes, as the number of business offers is astounding. How do you stand out from the crowd? Implement dynamic pricing into your business strategy. It’s a practice of adjusting prices instantaneously based on several factors, like current market demand, supply, and season. You will need an in-house engine or specialized software that automates the pricing process by collecting and analyzing data.
2. Competitor Price Tracking
Another e-commerce strategy requires you to monitor your competitors’ pricing practices. It is a great way to optimize your prices as you get insights into other businesses’ historical and current price shifts. There are a couple of ways to proceed:
- Manual tracking. This approach requires you to manually collect data and monitor competitors’ price changes manually. It’s time-consuming and error-prone.
- Software. This approach allows you to automate data collection and get necessary information about prices, availability, customer satisfaction, and promotions. It’s a great way to save time and boost profitability.
- In-house pricing engine. Having the same functionality as the price tracking software, in-house engines are costly and require maintenance. On the plus side, they are highly customizable.
3. Charm Pricing
Psychological pricing, also known as charm pricing, is a psychological approach that makes prices seem lower. Basically, it requires you to make your prices a couple of cents less than a round number. For instance, charge your customers $9.99 instead of $10.00. It might seem obvious, but according to Koningle’s study, of 1.5 million online stores, the e-commerce businesses that used charm pricing generated 4% more revenue than the rest.
Pricing is one of the critical factors that influence customers’ purchasing decisions. By implementing these clever strategies and optimizing your pricing, you will attract more customers and increase your sales.
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