In this article, I’m going to talk about 3 things in the digital world that can facilitate better pricing strategy implementation. So your coming digital marketing campaign can help you deploy in a different way.
What’s a pricing strategy
A pricing strategy is a business that use a variety of pricing combination to sell more products and services, for the purpose to maximize profitability. That’s it. And the pricing combination is set up and working 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 margins 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 one or more before.
I believe you bump into either of these messages before on 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 in exchange for US dollars. It’s time to head to Japan to travel and shop there. Much cheaper now!
You might hate your competitors who keep lowering 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 apples and buys lots of oranges back home suddenly a day, although the orange pricing is a little bit higher.
3 Things of the Digital World Better Facilitate Pricing Strategy Implementation
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 at the right moment and location. I believe even if 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 support, the digital world can fully resolve these problems and better facilitate your to implement a 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 automatic communication with a specific group of customers. Also, you could schedule when the email, App notification, and 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 sale, so you can reduce cost indirectly after decreasing the inventory loss rate by affiliate marketing in a way.
The 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 the UK, and USA who speak English to your place and boost the daily revenue by using a loss leader pricing strategy.
For example, if you are driving subscribers through a 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 promotional 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 in hotels nearby your restaurant.
The last thing – Better utilize psychology and anchoring effect on the right people
You aim to drive new customers with 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 apples so much. But when I find out my mum suddenly buys oranges instead of apples, there’re 3 key reasons.
- Feel bored
- Discount or free to try
- Friend referral
It’s a metaphor though, it reflects a truth in the business world. Competitor customers are also the same as my mum.
Stealing competitor customer data is illegal and also difficult even if it’s legal. But affinity data (probabilistic data) from your competitor’s website and 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’s website or App link on it, so the platform would generate a pool of audience for you to implement the retargeting campaign in search, Youtube, and display channels.
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 integrating pricing strategy with digital capacity can create an appealing piece of ad copy in your marketing campaign.
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Q1: What is the pricing strategy for our brand product?
A: Our pricing strategy for the brand product is based on a value-based pricing approach. We determine the price by considering the perceived value of the product to the customer and the competitive landscape.
Q2: How do we determine the price for our brand product?
A: To determine the price for our brand product, we conduct market research to understand customer preferences and the pricing of similar products in the market. We also consider factors such as production costs, distribution costs, and desired profit margins.
Q3: Do we offer any discounts or promotions for our brand product?
A: Yes, we periodically offer discounts and promotions for our brand product. These may include seasonal sales, bundle deals, or limited-time offers. Stay updated with our website and social media channels to avail of these offers.
Q4: Is our brand product priced competitively in the market?
A: Yes, we strive to ensure that our brand product is competitively priced in the market. We regularly monitor the pricing of our competitors and make adjustments to our pricing strategy to remain competitive.
Q5: Are there any subscription or membership options available for our brand product?
A: Currently, we do not offer any subscription or membership options for our brand product. However, we are constantly evaluating customer needs and may introduce such options in the future.
Q6: Can I negotiate the price of our brand product?
A: As an eCommerce platform, our prices are set and non-negotiable. However, we do offer occasional promotions and discounts that you can take advantage of.
Q7: Do we offer any price matching for our brand product?
A: Yes, we offer price matching for our brand product. If you find the same product at a lower price from a reputable competitor, we will match the price. Please refer to our price matching policy for more details.
Q8: Are there any hidden fees or charges associated with our brand product?
A: No, there are no hidden fees or charges associated with our brand product. The price you see during the checkout process is the final price you will pay, excluding any applicable taxes and shipping fees.
Q9: Do we offer any financing options for purchasing our brand product?
A: Yes, we offer financing options for purchasing our brand product. You can choose to pay in installments through our partner financing providers. Please check our website for more information on the available financing options.
Q10: What is our return policy if I am not satisfied with the brand product?
A: If you are not satisfied with our brand product, we offer a hassle-free return policy. You can initiate a return within X days of receiving the product, and we will provide a refund or exchange as per our return policy guidelines.