Pricing’s Effect on Conversion 5 Words:
Pennies, Sensitive, Cash, Voucher, Struggle
The Penny Drops
I worked for a major online reseller of hardware and software. It was mostly catalogue driven when I started and we advertised in a lot of magazines. Every week we were tasked with doing a price comparison with our competitors. Every week I’d undercut them and the next week they would return the favour, even if it was by just a penny it made us COMPETITIVE!
How price sensitive are you? Will you shop around for the best bargain for hours on end or simply visit a price comparison site?
Do you look for the promotion code on everything you buy?
Flash The Cash
Are you a member of a cashback site?
Getting the price point right will help your conversion if you have a lot of competition. If you don’t then you can set the price at whatever you want, can’t you? Well, no, you can’t. Your customers will go elsewhere. Finding the price point that boosts sales without cutting into your margin is the struggle.
The Promotion of ‘The Promo’
Yes, you do get killer promotions and they do work but do they always convert your visitors? It’s one to do test a few times on your landing pages or your email and see how price sensitive your visitors really are. A lot of businesses hunt for a killer promo or constantly have promotions running. I’m not convinced you have to test it and get it out of the way. You can always use a promotion to bring new traffic to your site, perhaps get them to signup to your email sends BUT make it a deadline driven promotion ie twenty-four hours.
If it Works
If a promotion works then repeat. If it doesn’t work then research your competitors and research other markets. Visitors are more likely to convert using a fresh approach or by novelty.
Test your pricing but you might be very pleasantly surprised by how insensitive your visitors and customers are to penny-dropping.
All the best,