Practically all online stores make mistakes in the field of pricing at the start of their activity. It seems that it is enough to set a price that is adequate to the expectations of the target audience, and sales will flow like a wide river. In practice, everything turns out to be much more difficult.
Let's understand the basic concepts. Upsell is an increase in the sales amount achieved through additional options. An example can be the offer to buy 2 copies of a product to get the third one for free. The cross-sell methodology is similar: in this case, the volume of sales is increased through offers from related categories of products. An offer in this case can look like this: "Buy a phone case and get a 1% discount on the latest iPhone model!". To be fair, it should be noted that both methods are ineffective in the Russian market due to the peculiarities of the national mentality.
But it's not just about the methods - for users, important factors are geopositioning and the level of service. Let's analyze typical user behavior based on specific examples.
Task #1: an online store in a small provincial town
The owner purchased the goods through a chain of suppliers, so the price for the buyer was set slightly above the average market price. As compensation, a marketing campaign was conducted: free delivery within the city limits was offered when purchasing over 10,000 tenge. The move didn't work out: it was not possible to reach a normal level of profit.
Task #2: Internet shop in a metropolis
The owner emphasized low prices but did not focus on organizing delivery. At the same time, the pick-up point was located in the suburbs. Customers for some reason did not rush to make purchases. The time factor was not taken into account: it is easier for buyers to overpay a small amount for delivery than to spend half a day traveling to a pick-up point.
In both cases, the reasons for failure are rooted in the incorrect calculation of the target audience's behavior. For a small town, delivery is not relevant, as it is possible to get to any point within 20-30 minutes. In the case of a metropolis with high competition in the retail sector, additional service becomes especially relevant. Even a minimal discount of 500-1000 tenge can be decisive since the cost is equal to the cost of a trip to the suburbs. For the customer, the price of the product is the sum of the cost of the purchase, delivery, and time spent on the process.
How to build a profitable pricing strategy to attract customers? Let's consider the basic algorithms.
Competitiveness is a constant monitoring process
Many entrepreneurs, offering an attractive price, without thinking, use the advertising trick: "If you find it cheaper, we'll refund you the difference!". And they fail. Because cheaper options are found sooner or later. More often than not, major retail chains offering seasonal discounts become competitors. Conclusion: even if you sell a product with minimal markup, regularly monitor your competitors.
Fair price is the one that is justified
When choosing a store to make a purchase, the user does not understand why the price may differ. He simply chooses where it is cheaper. He does not want to know anything about supply chains, logistics schemes, and customs clearance difficulties. For him, the price is something fixed, associated only with the intrinsic value of the goods.
If the owner cannot offer the lowest competitive price without harming his own business, there is only one argument left - service. The benefit for the client from the quality of service can vary: delivery, loyalty program, free consultations, cumulative discounts, etc. But all these advantages should be explained in detail to the target audience. Let's give examples of successful competitive wins through service.
- • A pizzeria serves customers in certain areas of the city, and its pizza prices are higher than the average market price. Marketers launched a permanent promotion: if the delivery time exceeds 1 hour, the client receives a certificate for a gift pizza. And it works: the number of loyal users is growing. Losses from occasional untimely delivery exceed the total sales value at high prices. We're talking about "Dodo Pizza," and it's all true.
- • The Lamoda online store includes additional options in the price of the product: the ability to try on before payment, a refund when refusing to purchase, delivery to any regions. In combination with a large assortment, this gives excellent results: more than 80% of customers make repeat purchases.
- • The "MIF" publishing house uses competent content marketing to increase sales volume. Useful mailings, regular promotions, and individual communication with each client have brought the company to the peak of popularity. Moreover, books are not essential items, paper versions are purchased quite rarely, and not everyone can afford the high price. In this case, service is the key.
Mistakes That Users Won't Forgive
In online business, deviation from classic sales can be acceptable. For example, it has become the norm to have a lack of detailed technical specifications of the product or insufficient qualification of operator-consultants. But there are mistakes that the audience will not forgive. These are:
- • Inconvenient order checkout interface.
- • Website not optimized for viewing on mobile devices.
- • Presence of out-of-stock items on the showcase.
- • Prolonged and complicated registration and order placement process.
- • Lack of categorization and search function.
Most of these problems have simple technical solutions, but for some reason, these e-commerce factors often ignore them at their own expense.
In addition to technical mistakes, there are also organizational mistakes. Among the most common are:
- • Substitution of the ordered product with a similar one.
- • Hidden commissions when paying with electronic payment systems.
- • Shifting the cost of taxes to customers when paying non-cash.
- • Presence of hidden fees associated with packaging and shipping.
The listed factors can form a negative reputation for the business or even lead it to complete failure. If there is a legally competent and diligent person among the buyers, the negligent owner of the online store may be subject to administrative liability. Ordinary carelessness can be too expensive.
Loyalty program: checklist and tips
Let's summarize. A good online store is one that:
- • offers delivery to any region, even if it is conditionally free, that is, included in the cost of the goods;
- • promptly responds to user requests and provides the opportunity to answer all questions in real-time;
- • provides accurate information about the technical characteristics of the product;
- • offers various payment options, without being tied to a specific payment system and not limiting the user by the order amount;
- • sells the product at the price indicated on the website as a public offer;
- • keeps the site up to date and does not turn the order process into a difficult quest;
- • does not send spam by email and SMS to customers who have made a purchase once.
Compliance with elementary rules can significantly increase sales volume and bring benefits in competitive struggle.