Do you make a lot of money during certain times of the year? You’re not alone. A lot of e-commerce businesses are seasonal, so make the most of your pricing strategy during your busy season. During busy shopping seasons, price becomes even more of a consumer touchpoint: customers are constantly out scouting for seasonal deals and bargains. Having the right pricing means you’ll not only maximize profits from the seasonal crush, but you’ll also provide customers with a great experience. So, as well as seasonal banner ads and promotions, are you ready for dynamic seasonal pricing? Make the most of your pricing during the high shopping season with these tips…
Importance of accurate pricing knowledge
Prime yourself for the seasonal market with live pricing updates from competitors. Armed with accurate pricing data, you will be able to adjust your prices and deals in accordance with your competitors.
- In order to make the most of dynamic pricing, you need frequent and accurate pricing data. Industry price benchmarking is one of the best ways to ensure that you are competitive (and all the big players are doing it too).
- Monitor the industry on a continual basis in order to get a clear picture of how your competitors’ prices fluctuate throughout the year. (Graphs and tables can help you process this data). Keep abreast of any industry developments in order to maximize your pricing model.
- Pricing knowledge will help you maximize customer conversions because you will have competitive prices that are in-line with the market. Get to know the Minimum Advertised Price for your biggest seasonal sellers: see if you can afford to at least momentarily undercut the competition.
Need help monitoring prices in your niche? See whether Prisync could help you automate and scale the process.
How to manage dynamic pricing
Dynamic pricing fuels the success of many big etailers: “Amazon changes its prices every 10 minutes on average.” (info here). Dynamic pricing will make your brand more flexible; and contrary to popular belief, it won’t devalue or cheapen your brand. Consumers are definitely used to fluctuating prices by now, and they won’t necessarily hold it against you.
- Make sure you remain profitable; dynamic pricing can actually make you more profitable than a traditional flat pricing model. Always set a profitable baseline to ensure that you keep things in the green.
- Think about how you are going to offer value to customers if you’re a new player. Penetrate the market with a low price to gain market share quickly, but don’t sell at too low for too long.
- Retargeting is important: don’t forget to entice customers back to complete purchases, especially if you can now offer them a better price.
- Make sure you prepare the rest of your store for the season by ensuring you’ve got enough stock, staff, and e-commerce marketing budget to spare.
Popular seasonal pricing strategies
So what makes a good seasonal price or offer? What seasonal pricing strategies should you be exploring?
- Real-time pricing takes advantage of the rules of supply and demand. Peak pricing means that you can capitalize on event-specific products and drive profits during peak times. By being in-line with the market, you should remain profitable.
- Customers are used to changing prices, so don’t be afraid to tell them that they’ve got the best deal in front of them. Urgency is an old sales tactic, but it still works as it’s a core e-commerce motivator. (It’s why flash sales are perennially popular).
- Seasonal offers look better if they are preceded by higher prices, but be careful about how you manage this from a customer experience point of view: people tend to get in touch if you slash prices right after they buy.
- Use geolocation in order to serve the best prices based on location to compete with local stores and retailers. Store user data and observe how customers engage with your store to help create pricing buyer personas.
- Sometimes a targeted environment is the best way to go. Seasonal sales can be easily set apart from the usual shopping experience with specific branding and calls to action in order to drive conversions and sales. (This is also where you direct any PPC traffic; make sure your PPC landing pages have enough customer incentives).
Know your customers, know your market
Make sure you have a holistic approach to pricing. Pricing data needs to work in conjunction with your understanding of your customers and what motivates them to buy from you (and it’s not the only price).
- Get to know your customers’ pricing preferences — split test prices and offers to see which ones appeal to your customers the most (free delivery, percentage discounts, free gifts etc). Try changing how your prices are displayed (color, language, decimals etc.) from time to time. All these tests will help you build a customer-centric pricing model based on data and experience.
- Prices aren’t the only thing you should look out: freebie offers and goodies are often a big draw for customers. See what your competitors are offering, and whether you can go up a level. The lowest price won’t automatically win: it’s all about perceived value for the consumer.
Focus your pricing calendar around key events
Black Friday, Cyber Monday, and Christmas are some of the core shopping events for consumers. If you’re clever, you can make a killing by focusing on these events with bespoke offers, deals, and seasonal products.
- You need loads of time to prepare for big shopping events like these; don’t leave things to the last minute. Make sure you have plenty of meetings to sort out budgets and KPIs beforehand; the best seasonal campaigns are planned out months in advance. Always leave have a window of flexibility to introduce last-minute products and deals if it looks like they’re going to be popular this year. (Every event has a popular product or theme — give the people what they want).
- Decided that you want to make the most of Black Friday this year? Start prepping customers for your deals sooner and sort out your infrastructure. More Black Friday tips here.
- Make sure you test your pricing technology before the big day to avoid any teething issues. All the biggest e-commerce CMSs have add-ons and plugins that you can use to change pricing. Woocommerce has plugins that allow for campaign and category pricing, whereas Shopify store owners can enjoy geo-targeted prices with pay-monthly apps. Drupal Commerce may require a bit more of a hands-on approach thanks to its development framework. Whatever you go for, test your pricing solutions months in advance; you might need to invest in premium packages in order to achieve all your pricing goals.
Warning: don’t race to the bottom
Dynamic pricing is NOT about racing to the bottom.
This game of low margins is a dangerous one, and you won’t be able to hold out to big e-commerce behemoths like Amazon. Focus on value and brand longevity instead, and make sure that your pricing strategy is profitable in the long-term.
Dynamic pricing is a core marketing strategy for ambitious e-commerce brands and businesses. Spend time researching pricing and collating data before launching your own price war. What’s your secret to seasonal success in 2017?
image source: http://411posters.com/tag/four-seasons/