Pricing: The Neglected Child of PPC | eCommerce Matters Ep. 012

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In this episode, we take a look at why pricing is forgotten when it comes to PPC, how clear communication between marketing and pricing teams is critical to success and share how you can use pricing to improve your campaign conversions.

Hosts: Philip Huthwaite (CEO & Founder of BlackCurve) and Rob Horton (Product Director at BlackCurve).

Guest: Emmanuel Aremu (Growth Director at BlackCurve).

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Full Episode

Podcast Summary

Introduction

In this podcast episode, the hosts delve into the relationship between marketing and pricing and highlight the need for better communication and collaboration between these two crucial aspects of business strategy. They explore the challenges associated with pricing and emphasize its significance in driving marketing success.

The Neglected Aspect: Pricing

Pricing is often a neglected aspect within organisations, as it can be misunderstood and perceived as more complex than other marketing activities. It requires a deeper conceptual understanding and can be challenging to grasp initially. Interestingly, digital marketing, which is typically considered complex, can sometimes be even harder to navigate than pricing. This highlights the need for marketers to recognise the importance of pricing and invest efforts into understanding and leveraging its power.

The Power of Pricing and Lack of Communication

The hosts discuss the tremendous potential of pricing to solve significant business challenges. They stress that pricing, when properly utilised, can address a wide range of issues and generate substantial savings and revenue. However, one of the main obstacles to harnessing the power of pricing is the lack of effective communication channels between marketing and pricing teams. This lack of communication prevents marketers from tapping into the expertise of pricing professionals and integrating pricing strategies into their marketing initiatives.

The Case Study

To illustrate the impact of integrating pricing and marketing, the hosts present a compelling case study. A merchant spent approximately £10,000 per month on PPC advertising and achieved a six-to-one return on investment. However, when they turned off their PPC campaigns and focused on optimising pricing alongside PPC efforts, their performance increased tenfold. This significant improvement demonstrated the power of pricing when combined with marketing strategies.

Avoiding Leaving Money on the Table

The hosts stress the importance of avoiding leaving money on the table by aligning pricing and marketing strategies. They emphasise that businesses waste substantial amounts of money when pricing decisions are not integrated with marketing efforts. By identifying winners and losers within marketing campaigns and adjusting prices accordingly, businesses can optimize their return on investment. It is essential to understand which products or services yield higher margins and focus marketing efforts accordingly to maximize profitability.

Leveraging Sales History and Demand Drivers

Analysing sales history, margins, and expected returns is crucial for making informed pricing decisions. Understanding the drivers of demand allows businesses to capitalise on high-margin products or services. By aligning pricing with market demand, companies can optimize their marketing efforts, attract more customers, and achieve higher conversion rates. This requires collaboration between marketing and pricing teams to identify the most effective pricing strategies based on market dynamics and customer behavior.

Collaboration and Open Dialogue

The hosts emphasise the importance of collaboration and open dialogue between marketing and pricing teams. They highlight that both parties need to engage in ongoing conversations to ensure pricing decisions are aligned with marketing goals and strategies. Marketers should actively involve pricing teams in discussions about increasing margins and seek their expertise to make data-driven pricing decisions. Similarly, pricing teams should communicate pricing updates and changes to marketers, allowing them to optimize marketing campaigns accordingly.

Conclusion

In conclusion, effective communication and collaboration between marketing and pricing teams are vital for businesses to thrive. Integrating pricing strategies into marketing efforts leads to improved return on investment, higher conversion rates, and overall better outcomes. By recognizing the power of pricing and fostering open dialogue, businesses can unlock significant opportunities and achieve greater success in their marketing endeavors. It is essential for marketers to understand the value of pricing and actively collaborate with pricing teams to maximize the impact of their marketing efforts.