Pricing is one of the most important factors when it comes to making a purchase decision. eCommerce is not an industry like SAAS where you show 3 options and highlight the best option which you want them to buy. This is not possible in eCommerce store as there is only one final price a single product can have. So, how to make pricing strategy a ‘smart’ pricing strategy?

Let’s start with a story again,

A salesman in his slim suit knocks your door on a Sunday afternoon. He is there to sell a scrub his company recently launched. You would want to scare away that salesman for disturbing you on the weekend, but he insists on just taking a look at the product which is at a huge discount and assures you that it will not take long.

You take a look at that scrub, which is a quality product and at a much lesser price than the market. You would want a scrub anyway so why not buy it now when you are getting that at a really low price. As a rational person, you buy it. You start using that scrub which worked really well and you start thinking that you got a really good deal on the scrub. This incident creates a positive impression of that salesman in your mind.

After a week or two, that salesman comes back again for selling that scrub. Now you will not want to scare him away, instead, you will welcome him with a smile for giving you a good deal. But this time he is not only having a scrub, he is also having a premium mop which is the bestselling product of his company. He asks you to take a look the mop, explains its features and everything. You are really impressed by the mop and decide to buy it without knowing its market price because you trust that salesman.

This time, that salesman sold you a scrub, a premium mop and also had a free coffee from you.

Will you allow any other salesman who is selling premium mop to enter into your door on a Sunday afternoon?

Getting my point?

This is a classic strategy used by salesmen to gain your trust and sell high-end products at the end. This can be also applied to new eCommerce stores who are planning to sell premium products. Sell a low-end product for a really low price; give excellent support and up-sell a premium product. It works really well. Even Amazon uses it to penetrate into a new market; they give high discounts at first on some products. Once we get used to it, we buy everything from Amazon.

Another strategy which can be used in eCommerce is the left digit effect, almost every one of us is aware of what it is and how it works. That .99 or .95 pricing strategy works really well in retail. Our brain is wired in a way that it lays more weight on the left digit effect, many companies have used this strategy in past to outrank their competition. You can start implementing this strategy site wide or some bestselling products. You can even use it to increase prices of your products for e.g. from $12 to $12.99. Customers won’t feel it as a big change, but it can increase your profit by a considerable amount.