More than 80% of the purchasing decision depends on price. Especially in the ultra-fast e-commerce arena where businesses showcase and change their prices every 3 to 6 hours. But before changing prices out of the blue you must know that there are certain conditions to do that. Decrease your prices to very low and you’ll leave a lot of money on the table raise them up high and you’ll end up hunting flies.

The Importance of Pricing

Let’s start by going through each insight down below to understand why pricing needs more attention ever than before.

• 90% of consumers invest their time to hunt the best online deals.
• 80% of “first-time” consumers say it’s important to be able to see and compare prices from different sellers.
• 70% of consumers believe they’ll get a better deal online than in brick&mortar stores.
• 50% of consumers will purchase products left in shopping carts if those products are offered at a lower price.

As you can see pricing is very, very important.

Let’s get into some tactics on how you can approach pricing to increase your profits margins and sales numbers.

Charm Pricing

Have you ever heard about the power of 9s? That is the strategy, where you end a price with a “9” instead of a “0” on the price tag. This is a very common tactic especially in physical stores, but you may also come across it in online stores as well.

Here’s why! Our brain perceives $50.00 and $49.99 as different values. According to consumer perception, $49.99 seems closer to $40.00, which is cheaper than $50.00 and product prices ending with a “9” are considered “the” deal to not miss.

Prestige Pricing

This is suitable for high-end, luxury, emotion-triggering products, where you should apply round prices such as $500, $750, opposite of charm pricing. Setting round prices on products which evokes emotions converts better.

A study by Kuangjie Zhang and Monica Wadhwa, claims that “A rounded price ($100.00) encourages consumers to rely on feelings when evaluating products, while a non-rounded price ($98.76) encourages consumers to rely on reason. When a purchase is driven by feelings, rounded prices lead to a subjective experience of feeling right,”

Bundle Pricing

This psychological trick makes online shoppers search for getting an extra item with the purchased product at the same price. This presents a golden opportunity for the wise e-commerce seller. To reduce this pain and encourage online shoppers to buy your products, use bundling, set your prices accordingly and get these customers to reach deeper into their pockets.

For example, Amazon has an advanced bundling strategy; it always suggests two or three related items that you may want to purchase at the same time. Most of the online shoppers jump onto these types of offers because they’re amazed by the simplicity of purchasing them all at the same time. Bundle two or three items together with a single price set an adequate discount, and you can start selling less-popular items.

What’s Next?

All of the tactics above are some part of the common approaches laid out from the people of Prisync. To learn more about other pricing strategies take the time to read most of their blog posts. When you’ve successfully implemented a strategy, you’ll either address your customer’s emotions or logic. Either way, you will start winning and boosting your conversion rates, sales, and eventually revenue. And if you want to automate that, we recommend you start using a pricing software sooner before its too late.