When a shopper comes to your store to purchase one item, wouldn't it be nice if they'd also consider buying more items as well? That's where the basket based pricing strategy comes into play.
The ultimate aim is to entice your customers to buy more, whether this is through basket add-ons or recommended products.
It's important not to confuse this strategy with product bundling, although they are similar. Customers everywhere like to feel as though they're getting a good deal or a bargain. In fact, knowing they're saving money by spending more money is often enough incentive to make the final sale.
In this post you'll learn:
- Three examples of e-commerce stores who get the basket based pricing strategy right
- How to differentiate basket-based from product bundling strategies
Understanding basket-based pricing
Basket-based pricing strategies work by offering personalized incentives when someone is about to make a purchase. If someone adds three items to their purchase but has recently looked at a fourth item, you might use this strategy to offer them a discount if they add the fourth item to the basket.
The reason this strategy works so well is because of how personalized the offer is, it's an intelligent way to recommend products and offer discounts based on real-life purchase and browsing history.
Benefits of basket-based pricing
One of the core benefits of basket-based pricing is the ability to give your customers an extra nudge. If you offer a store-wide discount on random products, you run the risk of customers not having any interest in the sales items. By optimizing your sales engine, you create a dynamic approach to product-sales.
Further from that, utilizing this strategy, a major benefit for your customers is the personalized customer experience they receive. To succeed in the world of e-commerce in 2019, you need to do more than simply place products on product and category pages. You need to create a brand around your products and show your customers that you care about more than just their money.
One way to do this is through not only personalized recommendations. By monitoring what your customers previously buy or browse, you can create customer-specific recommendations with discounts that encourage them to buy.
What's more, knowing they're able to get discounts that aren't available on the normal marketplace makes them feel special and cared for.
If you have underperforming categories or subcategories, you can use basket-based pricing strategies to boost sales for these.
Difference between basket-based and product bundling pricing
Product bundling is an effective strategy but it works by restricting a fixed set of products to a reduced priced.
Whereas you can use basked-based pricing to boost sales across a number of different products and even categories.
If you're looking for an effective way to drive sales and increase average order value, basket-based pricing could be the way forwards.
Amazon's basket strategy
When it comes to basket-based strategies, Amazon is a go-to-resource. Amazon use their recommendation feature to recommend products for future customers.
When we look at this item on Amazon, we're able to learn as much as possible about this item but if we're to scroll further down the page, we see recommended items.
You can see the items that people frequently buy together when buying the item you're looking for as well as seeing other recommended products.
Another feature Amazon uses is the add-on feature.
They use this strategy on low-priced products to encourage more sales. But in order to be eligible for this, you need to spend £20 on these add-on products before you can benefit.
MyProtein's basket strategy
MyProtein is a health and supplement e-commerce store that sells a range of products.
In the example above, you'll see that we've added two items to our basket. One great strategy they use is to ask whether or not you want to supersize one of your products.
It also tells you the savings you'll make by doing so. When you click that button, your basket is automatically updated.
This smooth customer experience is brilliant for keeping people within the checkout page and increasing the likelihood of them making a purchase.
Now that we've added these products to the basket, we see the following screen. Here, we're able to see that if we spend £35.00 more, we qualify for a free gift. If this is your first experience with MyProtein, then a free gift sounds like a great idea.
This encourages people to head back into the category and product pages in order to claim the free gift.
Final thoughts
It's no secret that basket-based pricing is great if you want to build a personal relationship with your customer at the same time of adding discounts for your most trusted customers.
When you use this strategy, you encourage customers to buy more than they initially planned. Be sure to keep the recommendations related to the product in question, or you'll end up confusing your customers who have no interest in what you have to offer.
By taking an intelligence-first approach, you can learn more about your customers but more importantly, learn more about the ways to keep them happy.
