Are you leaving money on the table...er, I mean, on your website?
In today’s competitive landscape, best practices around pricing are always changing: how to price, how to present pricing, when to discount, how to show a discount, whom to show a discount to, etc. Mastering these elements that dictate what people ultimately pay for your products or services can become an art form. Luckily, today’s technologies can help minimize the potential money lost from imperfect pricing strategies. This post will break down some tactics for digital marketers in retail and technology industries alike can use to optimize the pricing presented on their sites – whether the site has a B2C e-commerce model or is used to drive B2B demand generation.
E-commerce Sites: Recommend Appropriate Price Ranges for Each Person
At first pass, pricing for e-commerce sites seems straightforward — shoppers probably aren’t going to add a product to their cart if they don’t know how much it costs — so e-commerce sites need to make pricing clear. However, with limited real estate and a short time to grab someone’s attention, it’s important to recommend items that are within a visitor’s preferred price range to avoid leaving money on the table or turning them off.
For example, if we know a shopper typically browses higher-priced brands and products, we wouldn’t want to recommend lower-priced items just because they are “trending” or “most popular.” The same goes for promotions on the homepage. If you know a visitor is a high-value customer who has never purchased a sale item before, why promote a sale today?
It might be worth removing the Sale button in the top navigation for those visitors as well, or swapping it for the visitor’s favorite category.
The same can be said for shoppers with a strong affinity towards lower-priced items. If your site always promotes higher-priced goods to all of its shoppers, you risk them leaving to find a store they perceive as more affordable. Instead, you should be promoting the lower-priced products to the shoppers who prefer this price point to ensure they find something they like.
Technology Companies: Personalize the Pricing Page
For the B2B marketer, the pricing page is historically one of contention. While companies selling lower-priced solutions in higher volumes to small and medium-sized businesses (SMBs) may opt to show pricing in a prominent way, firms with a higher average sale price and more complex products may not want to reveal any pricing at all.
For the purpose of this post, I’m going to focus on the companies that have some sort of three-part tiering system. Many B2B marketers I speak with have a pricing structure similar to something like this: Standard: $50, Professional: $100, Premium (Enterprise): contact us. This begs the question, are you compromising average selling price (ASP) by promoting SMB pricing to Enterprise users? Will they anchor around the SMB pricing and think any Enterprise pricing you suggest is too high?
Other sites may list the tiers but hide pricing altogether, which may leave visitors thinking that the product or service is too expensive for them.
As an alternative, tech marketers can use personalization to give visitors the optimal experience based on their firmographic and behavioral data. With solutions like B2B Detect, marketers can identify the companies that are on their websites and deliver an experience that mirrors that.
There are two ways to determine company size. You can identify a visitor’s industry, company, revenue band, and headcount via reverse IP lookup. Or, if that information can’t be identified from reverse IP lookup (such as if the visitor is working from home or the local coffee shop), knowing which price to show requires a second layer: deep behavioral data. You could analyze the amount of time a person spends engaging with different pages or content on your website to determine which pricing to promote. Dyn is a good example of a company using this technique to adjust its site navigation and visitor experience for SMB vs. Enterprise prospects.
The decisions involved in setting pricing within your organization are probably quite complicated. But how you display pricing on your website doesn’t need to be. E-commerce sites can recommend products within a visitor’s preferred price range to avoid enticing visitors to buy lower priced items when they may have willing to spend more, or to scare off price-sensitive visitors with items that are priced too high. And technology companies can be more strategic about showing pricing information to different types of business customers to avoid anchoring enterprise prospects around lower prices geared toward SMBs, for example.
Of course, every site and every business is different, so we encourage companies to A/B test different pricing display strategies to find the optimal approach for them.
By leveraging personalization technology to understand e-commerce visitors’ price affinities and B2B visitors’ firmographic and behavioral details, digital marketers can employ an important strategy for optimizing revenues by promoting the right pricing and packaging to each person on their sites.