Did you know that you can experiment with pricing?
This is one of the best practices that shouldn’t be avoided if you have a goal to grow your online business. Whenever any kind of sales process is involved, pricing will play a massive role in your business. After increasing your number of sales you will get closer to your goals if you can develop various pricing strategies that convince your customers to take a chance on purchasing your products or services.
Pricing is more than just a number, it’s about finding the sweet spot between turning a profit and enticing to your target customers. While there are general applications of pricing, you can find various ways to adapt the art of pricing. The structure you follow might vary depending on your business but the strongest way to identify how to best reach your targets is to explore a number of options and test.
In this blog post, we have defined a few most tried and experiments with pricing you can apply into your pricing strategy.
Why Should You Experiment with Your Pricing?
Even though pricing is not considered as important in small-medium-sized companies, it’s a required task for any business. Businesses have to determine the best price for their products to be successful.
It’s a long process and can be a challenge. It asks for time to do some experiments and then you need to observe how it performs. By testing different tactics you can find the best price for your products or services.
Let’s start!
- Adopt Tiered Pricing
Start learning the role of each tier in your pricing strategy. Are your tiers likely to capture demand or upgrade their purchase?
For a definition, tiered pricing is a tactic that offers customers a variety of prices based on certain features or benefits of your products or services.
These tiers allow your customers to make options that best meet their needs. And often give the incentive to upgrade their purchases. - Track Your Competitors’ Prices
Tracking your competitors’ prices can give you a competitive edge while pricing. This is because you can see their price moves and understand the strategy behind them. This can be one of the effective ways to experiment with your pricing strategy.
You can take the approach of offering comparative pricing that is pitting your products against your competitors. You can automatically track competitors’ prices and offer competitive prices. - Use Charm Pricing
Have you ever noticed that most prices end up at $9? This is a marketing tactic that companies use to attract customers since human nature perceives $29.99 as a better deal than $30.00
Since people read from left to right, they are more likely to register the first number as a first impression and then they make a decision about whether it’s a reasonable price. You test this tactic to entice your price-sensitive customers. - Use Early Adopter Discounts
If you have been offering discounts from time to time and find it an effective strategy you can consider this one. Instead of lowering your prices, offer discounts for your new customers. This way you will still have the same prices and you can clearly show the real value of your products.
Remember that, when experimenting with pricing promotions are often better than simply doing A/B testing different price points. - Offer a Personalized Pricing
Willingness to pay is an important factor you need to consider while pricing your products. Not all your customers are willing to pay the same price. To lead all your customers into a purchase you can offer different prices by segmenting your customers.
Did you know that apps like Loom and Notion offer different prices for students?
The main driver is the willingness to pay. Students are less likely to pay high offerings so it will turn out to be an intelligent choice to offer them a lower price. And then you can offer higher for the future dates when they have a steady income.
Wrap Up
We have defined various tactics to experiment with your pricing strategy. If you are in between offering better prices but don’t know how, experimenting with your prices can be an effective way!
Hopefully, you can find the sweet spot for your prices and maximize your revenue for the long term.
pricing strategies
