Online store owners mostly ignore the importance of pricing. It can be a crucial step to maximize your revenue and take advantage of higher numbers of sales. But what are the must-try pricing tactics for Ecommerce stores?
Let's identify these tactics step by step. In this blog article we will dive deep into pricing tactics you must know and try for 2023. If you want to learn some of the pricing trends you can try right away continue reading!
Must-Know Pricing Tactics
1.Indicate Your Target Customers
The first step is to identify your target customers. You can ask the following questions:
- Who would like to buy my products or services?
- What are the demographics of my target customers?
- What are the social channels they are active on frequently?
- What are their shopping habits and at which times do they make the purchase?
Answering these questions can help you a lot at the beginning of your customer segmentation. This strategy is essential because after knowing who your customers are you will have a better picture of which pricing tactic you should consider. Your customers are the main drivers showing you the best price for your products. If at the end of the day, your customers do not find the pricing reasonable you might end up with no sales.
Let's say that you want to offer a high price compared to your competitors. At that point, you can consider promoting your products or services on social channels. But you should use the channels where your customers are active. This is a super helpful strategy because you can increase brand awareness in the perception of your customers. When you strengthen your brand image it can be a better idea to ask for premium prices.
2. Track Your Competitor's Price Moves
Pricing your products without knowing what your competitor's charge is a huge mistake. This is because Ecommerce is one of the highest competitive areas. This asks for immediate action. But how did it come this far? Let's list them one by one:
- After the Covid pandemic, most of the physical stores created online stores.
- Customers find online shopping easier and more flexible.
- Customers can find better deals in online stores.
- It saves time and effort for customers.
- It allows customers to compare products or services with various models and brands.
All these reasons are the factors that Ecommerce is competitive. You have lots of competitors and you have to be aware that new competitors are coming day by day. Since the competition is so hot, pricing wars can be huge. This is why you need to track your competitor's price. While tracking your competitors you can realize the fast price changes. But don't let them scare you. You can work with automated price tracking tools that can immediately inform you when your competitors change their prices.
Competitor price tracking software is able to track unlimited competitor prices. Monitoring your competitors can give you insights into their pricing strategy. Understanding the idea behind their pricing can lead you to consider which you would like to price your products as the same. You can also forecast their next pricing moves which can be helpful while deciding your prices.
3.Offer Competitive Prices
Competitive pricing is one of the best-used pricing strategies in Ecommerce. Let's list the reasons why:
- It allows businesses how pricing moves impacts their customers.
- It helps businesses to stay ahead of the competition.
- Businesses can find the maximum amount that customers are willing to pay.
- It can help businesses to increase their sales.
The list goes on and on. Since every online business has different goals and target customers, the benefit might change for one another. For the definition, it's a strategy where businesses take competitors' pricing into account while setting their prices. You don't necessarily have to define your price in line with your competitor's pricing. You can consider this strategy as it allows you to define your price while knowing what your competitors charge.
Competitive pricing can help online retailers to beat the competition in Ecommerce. You can consider using this tactic from time to time. Special days in the retail calendar might be the best time to offer competitive pricing tactics for your customers. Since all the customers will be hunting deals, offering a competitive price can help your store stand out. Ensure that your retail calendar is prepared to let your store shine in the crowd.
Having a retail calendar in place can guide online retailers on what actions they should take. You would be more aware of what actions you should take when it comes to pricing on Black Friday and Cyber Monday. Remember that pricing is one of the most influential parts of Ecommerce competition.
4.Set Repricing Rules
Finding the best price is one of the challenges you will be faced with. But the best price can change in different periods of time. For example, during the holiday season, lowering your price might be the best way to increase your sales. But to ensure that you are offering effective pricing you can do a repricing tactic.
For a definition, repricing is a strategy where you set specific rules for your product pricing compared to your competitor's prices. You can set your rules as the following:
- My price should be 5% lower than my competitor's price.
- My price should be 10% higher than my competitor's price.
- My price should be the same as the average price.
The list goes on and on. You can define your pricing rule as you wish. Remember that you will set your pricing in line with your competitor's pricing.
5.Test Your Pricing
The last pricing tactic you must know is testing your pricing all the time. The economy is changing and conditions are evolving and that's the main reason why you have to do it. Even though you think that your pricing is the most effective, testing can benefit your business. Let's list the reasons why:
- It enables you to preserve your perceived brand image.
- It can help you determine the ideal price for your products.
- It can give you insight into how customers react to different price points.
Price testing can help you to find the ideal price and strengthen your brand image in line with the pricing. You can get more insights into the lowest and the highest prices your customers are willing to pay.
Takeaways
Must-know pricing tactics are great ways to hit your revenue goals in 2023. If you follow the pricing tactics we have listed above you can start maximizing your revenue and number of sales in your Ecommerce journey.
