digital pricing strategy

In this article, I’m going to talk about 3 things in the digital world that can facilitate better pricing strategy implementation. So from your coming digital marketing campaign, it can help you deploy in a different way.

What’s a pricing strategy

Pricing strategy is a business use variety pricing combination to sell more products and services, for the purpose to maximize the profitability. That’s it. And the pricing combination is setting up and working by using this algorithm.

Product pricing = (profit + cost) / (per transaction value x amount of transaction)

For example, when you can control a lower cost to produce a digital camera, your product pricing on display can be lower. When your business model is relying on volume and can sacrifice margin such as Zozotown clothing supplier, you can win cost efficiency to set lower product pricing. Or when you aim to keep a 30% profit margin or higher meanwhile maintaining a quality of product and service, you might need to set higher pricing in the market.

Though things sound simple and direct, reality always is so rude. 3 critical factors are complicating this piece of so-called simple copy on your web and store. These factors are time, location, and people. Below are some scenarios I believe you bump into before one or more before.


I believe you bump into either of these messages before from social media when waking up in the morning. “Xmas on sale with up to 90% OFF”. Or “From Monday to Friday anytime in ABC theme park, bring your friend in for free.”


You might think it’s just a bottle of water, but the pricing is different between this bottle being sold in a downtown convenience store and being sold in a deep mountain.

Also, the Japanese YEN currency value is going down at exchange with US dollars. It’s time to head for Japan to travel and shop there. Much cheaper now!


You might hate your competitors who keep lowering down the product price. Due to this, you are losing your customers and market share.

Or my mum always says this service pricing is too low to buy. And sometimes she feels bored eating apple and buys lots of oranges back home suddenly a day, although the orange pricing is a little bit higher.

3 Things of Digital World Better Facilitate Pricing Strategy Implementation

pricing strategy

As mentioned 3 factors above, when we talk about offline store business, if you were not a Marvel hero, it’s very difficult to deliver the right pricing message to the right people in the right moment and location. I believe even you can do it, it must take you a huge of money and time by coming up with a very limited result because being a Marvel hero such as Ironman is not cheap.

Thanks to the internet and technology supporting, the digital world can fully resolve these problems and better facilitate you to implement pricing strategy.

First thing –  Right time is easy.

You aim to increase per transaction value from your existing customer by using a bundle pricing strategy. For target customers, you plan to target existing customers in your business, who are about to purchase or renew the service in Japan and the Los Angeles market shortly, instead of blasting to all markets and communicating with new customers.

In the digital world, a data platform such as CRM or CDP facilitates you to save customer information, categorize who is new and who is loyal, etc. Based on this information, you could set up an automatic communication with specific group customers. Also, you could schedule when the email, App notification, social advertising/post would blast in Japan and Singapore respectively. Timezone between these two markets are different, you don’t like your customer to receive your message at midnight in Los Angeles when it’s daytime in Japan.

If the added value in the bundle pricing strategy is not from your business line. Affiliate marketing that runs by using the CPA (cost per acquisition) model is helpful. You don’t need to buy the products before customers check out. The affiliate model is paid by cost per acquisition or cost per sales, so you can reduce cost indirectly after decreasing the inventory lost rate by affiliate marketing in a way.

Second thing – Right location is feasible

You aim to increase each table of return on asset (amount of transactions) from your Sushi restaurant business in Japan. So, you’re ready to appeal to more travelers from UK, USA who speak English to your place and boost the daily revenue by using a loss leader pricing strategy

Instead of turning on the loudspeaker and causing unnecessary pricing war, there’re several approaches to consider, such as dynamic pricing, mobile LBS, and influencer partnership.

For example, if you are driving subscribers through Web or mobile App and leveraging a data platform to manage, you could only notify subscribers from these two markets and display them customized pricing on web and mobile. This approach is just to integrate CMS with your data platforms such as CRM or CDP.

The other example is mobile location-based advertising. Google and Facebook (Instagram is one part of the Facebook advertising eco-system) are two key channels. Foreign travelers like to research and use to learn local and referral information. So you can run a promotion advertising campaign, and feed restaurant promotion messages to these groups of US and UK travelers, when they are traveling in Japan or they are staying hotels nearby your restaurant. 

The last thing – Better utilize psychology and anchoring effect on right people

You aim to drive new customers with the lower costs from competitors by using a psychologic or anchoring pricing strategy. This can be a lower-cost strategy because these customers have already been educated using your products. They don’t buy you due to many reasons, such as pricing, branding, service, etc.

Take my mum for example. My mum loves apple so much. But when I find out my mum suddenly buys orange instead of apple, there’re 3 key reasons.

  • Feel bored
  • Discount or free to try
  • Friend referral

It’s a metaphor though, it reflects a true in the business world. Competitor customers are also the same as my mum.

Stealing competitor customer data is illegal and also difficult even it’s legal. But affinity data (probabilistic data) from your competitor website, social media profile are easier to collect. A display campaign manager in the Google marketing platform provides an affinity customer creation feature. You can copy and paste your competitor website or App link on it, so the platform would generate a pool of audience for your to implement the retargeting campaign in search, Youtube, and display channel.


The pricing strategy can be thousands of combinations based on your unique business model and product USPs. The digital world facilitates your strategy thanks to its instinctive technology cutting edge, data-driven, and cost efficiency when compared with offline stores. Fully integrate pricing strategy with digital capacity can create an appealing piece of ads copy in your marketing campaign. 

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By Louis Lu

Growth Hacker & Digital Marketer, with a proven record of over 11 years experience in 20+ Asian markets, and 25,000+ connections in Linkedin

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