How to increase conversions by optimizing your e-commerce’s prices
We have talked a lot about techniques and strategies to increase e-commerce conversion. We’ve mentioned increasing usability, re-marketing, cross-selling or up-selling and a big etcetera of Anglo-Saxon words, but really, what’s the main reason a customer doesn’t make a purchase in our e-commerce?
Let’s be objective and put ourselves in the client’s shoes: the majority of the time price adaptation is what determines if a purchase is made. Imagine the perfect e-commerce in terms of conversion strategies but with prices 25% higher than the competition’s. Will it be successful? Certainly not.
On the contrary, if we think about a basic e-commerce, but with winning prices, we can guarantee that it’ll have better conversion than the previous “perfect” e-commerce.
This doesn’t mean that conversion strategies don’t work, but in order for them to be applied effectively, we shouldn’t neglect our price optimization under the premise of being too cheap or too expensive. To analyze price positioning for our e-commerce, it would be helpful to have a monitoring software for the competition’s prices, like the one offered by the Spanish company, Minderest.
The first point will be to find out what our situation is in terms of price per category, compared to the competition. Are we cheap or expensive? We’ll probably find products we’re in line with market price wise but others where we’ll be the most expensive or, on the contrary, the cheapest. Being the most expensive will mean a practically useless conversion for the aforementioned products, and therefore we should adjust our prices, within reason, so they can be re-marketed effectively.
Though being the cheapest might seem like a good idea at the outset, it depends on how much cheaper we are because if we’re too cheap, we’ll be losing an important profit margin. In this case, we should increase said prices even if we still want to be a cheap option.
If we make this price adjustment on a daily basis (using an API, for example) and are always competitive, we’ll notice from the beginning that the other things we do to improve conversion come into play because we will have solved the customer’s first price perception barrier.
Your competition is probably already doing it, but you? Do you have your e-commerce prices optimized?