Price is the most important factor that affects the sale and popularity of a product. It is the art of pricing correctly that allows a business to thrive in a market and ensure the same for its product. Many businesses set the prices of their products without proper deliberation. This is a mistake, because of which they fail to leave a mark. Thus, pricing strategies are of utmost importance, and here, we bring you 9 excellent pricing strategies to help you grow!
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Why are pricing strategies needed?
Pricing is important since it defines the worth of your product and whether it is worthy of your
customers’ time and investment. Pricing strategies determine the prices companies set for their products and also serve a variety of objectives. They can be used to maximize the profitability for each unit of the product sold or for the market overall. It can also be used to defend a brand’s existing customer base against new brands, to increase sales and customer base within a market, or to enter a new market.
9 Effective Pricing Strategies Sellers should try in 2022
1. Incentive discounts
Incentive discounts are given to customers after they perform certain actions. An example would be where the sellers give a 5% discount to a customer’s order if he or she first shares their product on any social media platform.
This type of discount is meant to reward their behavior of favoring a particular seller over others. This can also promote and/or benefit your company in other ways. With this discount, sellers can benefit much more than the discount’s value would suggest.
2. Discounts for new customers
For any business, creating a customer base or attracting new customers can be difficult unless they come up with a pricing strategy that compels the customers to purchase their product. Discounts and promotions are effective incentives that can be used to attract customers’ attention. For new customers, a free trial period can be given to make them subscribe to your product or services. Once this trial period ends, entice the customers further by introducing them to products with new and superior features to choose from, excellent customer service, etc.
A similar strategy was followed by Wayfair, wherein on visiting the site, you are immediately greeted with a “70 percent off” coupon for your first purchase. To learn more about this, click on Wayfair vs. Overstock.
3. Reward loyal customers through referral discounts
Referral discounts are meant for a select group of existing customers, similar to the discounts given to new customers. Only loyal customers who advocate for your brand by referring their friends and family to your store should benefit from this tactic. This will encourage them to refer your brand to more people, eventually benefiting your business in multiple ways.
4. Subscription Discounts
Another effective way to promote the growth of your business is by offering attractive discounts to customers willing to subscribe to your brand. Customers who enjoy the benefits of such discounts will feel like they have earned the rewards by subscribing to your brand. If your non-followers are aware of these discounts, they too would want to do the same to avail of the maximum benefit of any such offer.
5. Quantity/Volume Discounts
Many different strategies are used by different brands under this tactic. Sometimes, discount cards are given to customers, offering them a free item after they buy a certain quantity of a particular item. Various promos such as “buy one get one free” or ”buy two get one free” is often related to the concept of quantity discount.
6. Coupons and Discount codes
Retail discount codes are popular with consumers and retailers alike. Sellers who issue discount coupons and codes can enjoy increased customer loyalty, ease in attracting new customers and maintaining their existing market share, etc. Coupons are also helpful in selling piled-up stock twice as fast as without them.
7. Abandoned basket incentives
Customers often stack up against their digital shopping carts, however, they don’t take them to checkout. To grab such missed opportunities, shoppers should be encouraged to make purchases by following up abandoned baskets with reminders, giving offers to help if they are having trouble checking out, and sometimes offering discounts and other incentives. These often encourage shoppers to go ahead and finally empty their carts, thus creating more opportunities for sellers.
8. Use Early-Bird Discounts on New Products
When we launch a new product, we want as many people to buy it as possible. One can invite their customers into pre-ordering a product by offering attractive deals and discounts on the same. However, care must be taken while offering such discounts. Large discounts on new products should be avoided as they can reduce the value of the product in the shoppers’ minds. Sellers must ensure that the discount is only a small percentage of the full price of the product.
9. Follow up with event attendees
Sellers often attend and host events for the promotion of their products. They must follow up with the attendees of these events as they can potentially provide a customer base for the seller. The follow-up can be done through email, promoting your products and/or services. A link to their sites must be put in the email itself so that the prospects can go check their products out. Create campaigns on your site for visitors specifically, encouraging them to purchase your product.
In order to ensure maximum benefit from pricing tactics and strategies, senior executives need to first identify the company’s pricing position, pricing segment, pricing capability, and competitive pricing reaction strategy. Pricing strategies are all about balance. You can see great results if you use them sparingly and offer them at the right place, at the right time, to the right prospect.