Pricing is a key factor when it comes to making a good number of sales. The smarter you are with your product prices, the better results you will get, and to make sure you reap the maximum benefits, here are some tips on how to get prices right, on your e-store.
10 Pro Pricing Tips That Improve Sales
Below are 10 tricks that you can consider to boost sales on your e-store:
- Use Role-Based Pricing
- Set Specific Prices
- Try Cost-Based Pricing
- Consider Competitor-Based Pricing
- Become a Loss-Leader
- Benefit From The Left-Digit-Effect
- Try Comparison-Pricing
- Display Retail Prices
- Show Similar Products at Slightly Different Prices
- Try Price Skimming
Now let’s explore each pricing tip in more detail.
1. Use Role-Based Pricing
Valuing your loyal customers is one of the best things you can do to maintain long-term relationships. From offering customer-specific offers and discounts to creating a personalized experience it’s important to make your customers feel special. Offering discounts and offers to certain customers who make repeated purchases or are your long term customers is a great way to increase your customer base.
There are multiple ways to offer user role-based pricing and one, is to use a plugin like the Woocommerce Role Based Pricing. With this plugin, you can offer discounts or markup prices. Once the prices are set, only the specific customer with a certain user role will see the new prices.
2. Set Specific Prices
You must have seen stores adding product prices like $4.99 and some adding prices which are rounded e.g $5, $6, etc. While prices might not seem any different when rounded off, they have a profound effect on the end consumer.
According to research done at the University of Florida, certain customers assume that when brands round off prices, they may be charging much higher. To avoid that effect from reducing sales on your site, try to add specific prices which are not rounded.
3. Try Cost-Based Pricing
This type of strategy is used by many beginners as they enter the world of ecommerce. The cost-based pricing is a method in which you set the prices, based on how much profit you want to make.
Using this strategy your focus would be on the profit and not on the customer. Adding product cost + other expenses done on the product + the profit you want to gain, you can estimate the pricing for your products. Using this strategy you can make good profits if delivered smartly. If you deliver good quality, you can justify the expenses and make a strong customer base.
4. Consider Competitor-Based Pricing
In today’s age, there is competition everywhere and in every niche. New brands constantly emerge and come up with new strategies to take the lead. As a shop owner, one way you can stay afloat is to do market research and check the prices of products sold by similar brands.
Make a sheet and add the prices of each product by brand. Then list the highest and the lowest to find the average price. This strategy will help you make handsome profits and still stay relevant.
5. Become a Loss-Leader
Have you ever seen a product and felt like the price is unbelievably low? If so, you must have come across a brand that uses the loss leader strategy. It is very common and has helped multiple brands gain huge profits over the years. What the strategy does is that it tricks people into thinking that they are getting a product at an extremely low price.
Once the customer buys the product they either buy more products e.g if you sell a gaming station for a low price, people would buy games and other accessories as well with time. That way you will recover the loss and make profits from recurrent sales.
6. Benefit From The Left-Digit-Effect
Have you ever seen a product price e.g $4.99 and considered it very low compared to $5? If so, you have experienced the Left Digit Effect.
In this effect, people tend to underestimate numbers with decimals, and round them down. E.g if a number is 3.49 they will consider it close to 3 and will ignore the 0.49 value with it. That is why many brands use decimals to indicate lower prices which is in reality a mere psychological effect.
7. Try Comparison-Pricing
This is a very useful trick to boost sales of your products. To make a product look more appealing to the customer, you can introduce a product that raises its value. Let’s take the example of Williams-Sonoma. They had a bread maker worth $275 which was not selling very well.
To improve the sale of this device, they introduced a bread maker worth $415. The quality was slightly better but seeing the price difference, the lower price of $275 seemed like a big deal and so their sales improved.
8. Display Retail Prices
Showing off the huge discounts you are providing to your customers is a great strategy to improve sales on your website. You should display the registered retail prices on your site and show customers how much they are saving by buying from you.
You can also show the prices of your competitors to show your competitive edge. While you may not offer lower prices for every product, when you do, make sure to show it off.
9. Show Similar Products at Slightly Different Prices
Have you ever visited an online store and gotten overwhelmed by the huge catalog, discounts, and offers? If so, you have experienced decision-making paralysis, firsthand. When someone has a ton of options to choose from, comparing each and making the best decision becomes too hard to handle.
You should avoid that by using slightly different prices so that the price becomes a differentiator and can help the customer make decisions. This step can help you improve your sales as product price is a big concern for most customers.
10. Try Price Skimming
Price skimming is a great way to create a sense of urgency among customers. When you offer lower prices for a very short period, customers tend to avail of this opportunity faster to avoid missing it.
The FOMO (fear of missing out) helps to sell large quantities of products faster than compared to the result we get with other strategies. You can use titles like “limited time offer”, “2 items left” or “sale ends in 24 hours” to further emphasize your point and create a buzz among your audience.
In this article, we explored 10 pricing tips that can help you increase sales on your site. From role-based pricing that increases customer loyalty to the Left-Digit-Effect, which makes a customer underestimate the price, these simple tips can prove to be a game changer for you.
You can use skimming effects where prices are drastically cut for a short period to create urgency or try comparison pricing to make a product appear more appealing. Check out all of the above tips in detail, and let us know in the comments if you try any of these yourself.