Welcome back to our ten-part series on getting your pricing right for Black Friday and Cyber Monday (BFCM). In the previous six articles, we've explored a wide range of pricing strategies and techniques, from enhancing Google Shopping visibility to leveraging the power of dynamic pricing. Today, in Article 7, we're about to cover a simple pricing technique, that is easy to setup and test, yet could be extremely powerful in improving your conversion rates during this promotional season and beyond.
We'll explore how simplifying your prices can make a significant impact on customer perception and purchasing decisions, especially if you're dealing with branded goods and employing a price-matching strategy, where the products are available from multiple retailers at the same price. How else can you get the edge?
Unlocking the Power of Simple Pricing
Black Friday is the ultimate battleground for retailers, where every advantage counts. It's not just about slashing prices; it's about capturing the attention of your customers and convincing them that your offers are too good to pass up. This is where our pricing tactic comes into play.
Setting the Scene: A New Approach to Competing
In a competitive market where numerous retailers offer the same products at identical prices, it can be challenging to stand out. When everyone is competing on price and no one is willing to budge, how do you differentiate yourself? Well, what if I tell you, you can still use price to differentiate and get the conversion? The answer is in how you frame and present those prices to your customers.
Consider this scenario: you and your competitors are all offering the same popular gadget for the same price of £1,499. In the eyes of customers, this creates a price stalemate. However, this is where the power of simplicity and perception comes into play. A research paper showed, that by presenting your price in a more straightforward and comprehensible manner, you can alter the perception of value and drive better conversion rates:
"£1,499.00" versus "£1,499" versus "£1499".
The crux of this approach lies in the idea that simpler prices (in this example £1499, without the decimal place or comma) is less overwhelming and, surprisingly, less expensive in the eyes of customers. Even though all three prices are the same, the extra syllables and commas in the first two versions make them feel and sound like a much higher cost. This cognitive bias can lead customers to perceive the more complex price as a less attractive deal, even if it's identical to the simpler versions.
Household Names Adopting this Technique
Will Currys, who has the second-largest market share in the UK lose out by not adopting this approach? Can smaller players therefore adopt this technique during BFCM and take advantage too?
What to Expect from Implementing Price Simplicity
Implementing this pricing strategy can yield several advantages:
- Increased Conversion Rates: By simplifying your prices, you create a more approachable and attractive offer. This can lead to higher conversion rates as customers perceive your products as more affordable and of better value.
- Competitive Edge: In a market where everyone offers similar pricing, this approach provides a competitive edge by altering the customer's perception of your pricing, making it stand out.
- Improved Customer Experience: Customers often prefer straightforward pricing. Your transparent and uncomplicated approach can lead to an improved customer experience, increasing loyalty and repeat business.
- Enhanced Brand Image: A simplified pricing strategy can positively impact your brand's image. It can convey transparency, trustworthiness, and a customer-centric approach.
- Potential for Higher Profits: While your prices remain the same, the increased conversion rates can lead to higher sales and potentially increased profits.
How to Implement Simplicity in Your Pricing
Now that we understand the power of simplicity in pricing, the next question is how to implement it. Even if you wish to keep the commas in your pricing, consider at the very least removing the decimal places in the run-up to BFCM and assessing the impact on your KPIs. Here's a brief guide on how to configure your price formatting for some of the main eCommerce shop technologies:
For Shopify Users
For Magento Users
For BigCommerce Users
In conclusion, the Black Friday pricing test based on simplicity is a potent strategy for enhancing customer perception and ultimately driving sales. The simpler your prices sound, the more approachable they become, creating a win-win situation for both you and your customers. So, as you prepare for Black Friday, consider giving this strategy a shot and watch the impact it can have on your bottom line. Remember, even in the world of complex pricing, simplicity is a powerful tool that can set you apart from the competition.