Our shopping culture has certainly changed in the last decade and practically everyone in retail seems to be slashing their prices constantly. Discounts are all around us, and, as consumers, we’ve started to be conditioned to not make a purchase unless we’re getting a great deal.
According to Jack Welch, the former CEO of General Electric (GE) “if you don’t have a competitive advantage, don’t compete”. In a nutshell, he meant don't bother getting into the fray if you don't intend to win!
The job of getting our pricing right never seems to get any easier. Just how do you figure out what
Perhaps now is the time to start experimenting in small ways to find a strategy which has the most beneficial effect on your conversion rate.
When you first launched your business you were probably nervous about price setting and didn't want to scare potential customers away by pricing too highly. It was probably easier (and you felt safer) to price low – your thinking being that this would attract new customers and steal customers away from competitors.
Well, this may have seemed like a good strategy in the early days but over time, have you made only nominal increases to your prices without considering what this is doing to your bottom line?
Pricing your products and ensuring you have built in sufficient margins to sustain your business is one of the most important decisions you’ll make.
The one thing that is going to stop your customer's in their tracks is price, whether that price is ridiculously low or flying high amongst the clouds. Or, on the other hand, it could be that your prices seem fair to them, offering value and benefits not seen elsewhere, i.e. your prices are just right.
How much should you pay for an item – any item? If you asked the majority of consumers they would say that a fair price would cover the cost of manufacture plus a little extra for profit.
The following is a transcript from a Professional Pricing Society Podcast, recorded on Thursday 5th January 2017 and published at https://pricingsociety.com/pricing-podcast-philip-huthwaite/ on Thursday 12th January 2017.
To be a successful Ecommerce retailer you need to pay close attention to your pricing strategy/pricing strategies.