Pricing strategy plays a huge role in eCommerce sales. The best pricing strategies take competitors’ prices, your cost, and your target audience into consideration. When pricing your items in your eCommerce store, psychology should be at the forefront of your decisions.
Online shoppers are real humans who you want to motivate to engage in a behavior- purchasing from your store. The quality of your products and online store certainly matter, but pricing also has important psychological effects. That’s where psychological pricing comes in. with a few simple tips, you can develop pricing strategies that encourage purchases. Here are some of the top psychological pricing strategies for competitive eCommerce pricing.
End Prices in 9
There is literally a one-cent difference between something being $19.99 and $20.00, but that one cent makes a huge difference in how our brain values the two values. Ending product prices with a 9 is a common strategy in both brick-and-mortar and eCommerce retail and for good reason. People perceive $20.00 and $19.99 as two separate values, and actually attribute $19.99 as closer to 19 than 20! People automatically associate prices ending in 9 with discounts and bargains and are more likely to see it as a deal.
Consumers are constantly weighing prices when shopping online. You can use price anchoring within your own store to drive purchases. Anchoring is the psychological concept that we rely on the first piece of information offered, and then consider purchasing based on that. By placing a moderately priced item next to a more expensive one, you can encourage sales of the moderately priced item because people will see it as a great value compared to the more pricey one next to it. Introducing a more premium version of a product can actually help the normal one sell more.
Bundles and Free Gifts
Online shoppers love deals and discounts. If they feel like they are getting something for free or for a steal, they will be more likely to pounce. Adding a small free gift with purchase (an accessory, free shipping, etc) can help motivate buyers. Additionally, offering kits or bundles at a discount is a great way to increase the average order value and convince consumers to buy. You can recommend complementary products and show the discount customers would be getting to buy them all together.
Place Review and Social Proof Near Pricing
Products with high ratings and overall social popularity are more likely to sell. Consider adding a “top-seller” badge to very popular items and place customer reviews and ratings near the price. When consumers see the positive feedback from others, it serves as powerful social proof that motivates them to buy regardless of price.
If your brand is centered around high-quality, premium products or services then you may want to refrain from lowering your prices. Brands like Apple have found huge success in keeping a higher price point and convincing consumers of the quality and prestige of their products. In order for this type of pricing to work, your brand should exude quality by offering a small selection of products, focusing on high-end products and consumers, emphasizing profits over market share, and creating demand. If this is your brand, rarely offer discounts and maintain an aggressive pricing strategy.
Price with Buyers in Mind
While competitor prices do matter, your buyer and your brand are the most important considerations. You must price in a way that motivates your target audience. Create detailed buyer personas that describe your ideal customer. This, in turn, will allow you to understand their willingness to pay for certain items and can guide your pricing strategy.
You must also evaluate your brand persona and objective. If your goal is to sell the most affordable products in your niche, your pricing strategy will be much different than if you aim to sell high-end, luxury items.
Implement Your Psychological Pricing Strategy
Implementing a successful pricing strategy requires you to consider a number of complicated factors. The most important thing to remember is that how you price your items directly impacts how consumers view them and their motivation to buy. You can greatly influence shoppers’ purchasing decisions with the psychological pricing strategies shared above. Always price your products to appeal to your target audience and in a way that encourages purchases and is true to your brand.
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