When we analyze the behaviour of the customers, we find that price is not the only factor that determines the sale of a product. Though many online businesses hold the view that lowering the price range can attract customers and thereby increase sales. This is not entirely true. A small online business that has been selling for a while seeks growth. This growth is not possible until and unless there is some hike in the price of the products. If approached in the right way, a price increase can lift your profit margin, lower your dependency on sale volume and attract new customers. To make your work easy I have listed things you should and shouldn’t do if you want to sell online at higher rates. These pricing strategies will help you immensely to gain profit.
Watch your competitors
Keep a keen eye on how their prices have escalated in the past years. If you see that there has been a price rise in your business sector, the buyers will be more compliant with the price change. However, If you are the exception who has raised the price then you need to offer something different that your competitors have not come up with yet.
Do not hide anything from your customers
Several retail and hotel establishments can raise prices without their customers realising. Nevertheless, if you own a B2B corporation or a service firm, it is advisable not to slink up the price into the bill. When you want to raise your prices, let your clients know ahead of time. This is a smart strategy for keeping customers. It allows them to keep the former pricing for half a year or a year if they renew their contract before the price rises.
Give reasons for the price rise.
It’s not mandatory to go over your profit margins in great depth. Simply explain why you are increasing your prices, emphasising the benefits to the buyer. For instance, a notification saying, “We will be boosting our monthly subscription costs by 10% beginning in August to give you greater service by giving 24/7 live customer care,”
Do not look guilty
Customers may try to negotiate if you appear unsure or apprehensive about your price hike. Instead, concentrate on the customer benefits that come with the price rise, like new services or extended product offerings.
You might lose a few customers but will gain a few too.
Clients, that are purely concerned with the price may choose not to do business with you, but are these the type of clients you want to deal with? Small business owners frequently realise that raising prices brings new and more profitable buyers who are willing to spend more for superior quality.
Here are a few ideas and pricing strategies that do not involve losing customers:
- Add fees to increase prices: Fees might be added to raise pricing. Consider adding fees to cover rising costs instead of boosting pricing for your real product or service. When a single cost, such as raw materials or shipping, is rising, this strategy works well. Just keep in mind that if those costs drop, customers will anticipate the fees to drop as well.
- Introduce the high price in stages: Increased prices should be implemented in stages. If you’re concerned about losing customers, hike prices for a small group of customers to observe how they respond. If the majority of them agree, you can extend the raise to the rest of your consumer base.
- Maintain current prices for existing consumers while increasing prices for new customers: Make existing buyers feel privileged by informing them that they will receive preferential treatment. Emails and messages like, “New year brings new prices! We will be raising prices from January 1st. Since you have been a loyal customer for many years, your pricing will not change for the next 10 months.
- Sizes should be reduced: This is a common approach used by food product brands to maintain prices the same but cut package sizes significantly so that buyers don’t notice. From cosmetics to wine, you can do this with nearly any retail goods. If customers notice, though, this strategy may backfire. If you’re concerned, consider drastically reducing sizes and charging less according to the content of the product.
- Your prices should end with a “9”: This sounds weird, right? It is supported by many researchers. Several tests were conducted in this investigation. One of them discovered that women’s clothes priced at $49 outsold the same item priced at $45. In fact, on average, the prices ending in a ‘9’ outsold the lesser prices by 25 per cent. Isn’t it surprising? People can be rather amusing. End your rates in ‘9’s to get the most bang for your buck.
- Make a difference: Create product or service bundles by incorporating features that don’t cut into your profit margins but leave a lasting impression on your shoppers. For instance, A furniture company that sells wooden items could offer a free extended warranty on their products. A cosmetic brand might provide each customer with a complimentary cosmetic product that is kept on-site and is customised according to her/his (makeup is not gender-specific) needs.
- Raise pricing on certain but not all products or services: Increase the cost of your most popular products and services only. Because they account for the majority of your sales, this will have a significant impact on your profits.
- Offering multiple payment options is a terrific idea, especially for higher-priced items or shopping carts over a specific amount. In these situations, Buy Now, Pay Later is a great tool to use because it makes clients feel better about spending more money with you. After all, they don’t have to pay it all at once.
If done tactfully, you’ll find that a price increase, not only raises sales but can also alter the face of your business. All it needs is proper planning and a considerate way of alerting clients. So go ahead, employ these tricks in your business and gain that long due profit!
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