How do you be the one place that shoppers want to return to? I’m assuming you’re doing your best to offer excellent experiences to your customers, but have you ever thought about how pricing can level up your game?
Many brands offer blanket discounts and price drops to both encourage new customers and motivate existing customers to return. That strategy is a dangerous one since it encourages customers to simply wait for a "deal."
Instead, let's explore a few pricing tactics that will give purpose to your strategy.
Let’s dive in!
1. Loss-leaders on popular items
Each product has its own characteristics, and your approach to pricing your products should vary based on those unique qualities.
Some products are better than others at getting traction to a store.
For instance, popular products like Xbox or PS5 are great at driving traffic. A lot of people search for them online, and some of them are going to end up visiting your website.
One way to increase the likelihood of that happening is by offering these best-sellers at a great price. If you can afford to cut into your profit margins a little, you can expand your reach, increase your store’s visibility and traffic with this simple strategy.
And price comparison sites—which are insanely popular—will help you promote those items you choose to offer as loss-leader.
Think of these websites as sort of advertising platforms, and your discounts as ad campaigns. Set a monthly budget for your planned discounts on popular products and end the campaign when you hit the limit. See how it works for your store without taking any risks.
Now, although it seems like a short-term strategy, its main purpose is to influence shoppers’ perception of your prices in the long run.
As Guru Hariharan, a former Amazon Business Leader and the founder of CommerceIQ puts,
“Set a low price for a TV that everyone wants to buy and perhaps increase rates and earn higher margins on an associated product, such as a connecting cable. Few customers will fret about this because they've bought the TV, the more expensive item, at a good discount.”
2. Create personalized pricing offers
Accenture found 91% of shoppers are more likely to shop with brands that recognize their preferences and offer relevant recommendations and deals.
So how do you use your pricing power to offer a personalized customer experience?
First of all, if you’re not collecting customer data or using a CRM platform already, start gathering data:
What an individual has bought from you
When they buy from you
How frequently do they shop with you
What’s their average basket size
What do they add to their wish lists
What did they look for on your site before
What type of discounts they’ve used
The amount or percentage of the discounts previously used
Having this information on hand is incredibly helpful when understanding your customers and offering them deals they’ll be interested in.
Alright, you’re collecting and recording customer data now. What to do with it?
Send price change emails
Now, you know who’s shopping less than they normally do, or who’s price-conscious, or who is close to a purchase decision, you can market to them effectively.
When you’re repricing your products, let customers know that the price of a product that they’ve shown interest in drops.
In the short run, doing this will help you sell more. But perhaps more importantly, shoppers will see that you’re paying attention to their wants and needs.
And the fact that your emails are actually useful will make them open more of your emails and check out more of your campaigns.
Offer personalized discounts
Store-wide discount campaigns are costly, and often, they’re not as effective as they seem to be.
Instead of using store-wide discounts that hurt profitability, send shoppers personal promo codes they can use on products they’ve shown interest in.
Doing this will boost the effectiveness of your offers and help you sell more.
But more importantly, it’ll help you maintain a good relationship with customers in the long run.
3. Let shoppers make their own bundles
One great way to keep your customers is making the time they spend with you seamless and fun, and bundles can help you accomplish that.
Bundling is an increasingly popular practice where sellers put several related products together to sell them as a bunch.
The logic behind it is simple: you want shoppers to buy more than what they’re planning to buy.
By displaying products that go well together in a bundle, you’re reminding shoppers that they might be better off buying them all. And there’s often some amount of discount so that the bundle is a little more enticing.
What if I told you, there’s a way to make shopping from you even more interesting?
Letting shoppers create their own bundles will be the extra nudge that’ll make them return to your store.
Think of it as a gamification project. Set a discount budget for each customer and let them decide what they’ll use it for.
Ecommerce is crowded. You have to do your best to stand out in this enormous crowd and pricing can help you do that.
Use these strategies to keep your customers loyal to you in the long run. Remember that as long as you understand their interests and needs, there’s no need for them to switch to another store. Keep in touch with them and meet their expectations to the maximum extent possible.