Many new merchants underestimate the value of coordinating and finalizing the pricing and promotion opportunities. Most merchants develop a pricing strategy based on what the competitors are chagrin for their similar products.
They never perform the necessary brand analytics. However, they will sell their products at the best price if they decide the price by comparing the prices, buying habits of the customer, their target audiences, and the company's considerations.
Therefore, today we will explain how to develop effective pricing and promotion strategies using appropriate ecommerce brand analytics and explain in-depth about the same.
What is ecommerce brand analytics?
Ecommerce brand analytics is a feature that gives insights to the business that helps them make strategic decisions regarding their marketing and advertising needs. It also helps the businesses improve their current strategy and implement new strategies to maximize their revenue.
They do this with the use of software and real-time price optimization. Brand analytics help the business know-how their business is performing online and how their target audiences perceive the business.
Conducting proper brand analytics using correct brand analytics software is very important for the success of any new strategies. Most businesses use the brand analytics tool when they talk about rebranding or trying to make some changes in their prices or promote their products.
This brings us to our subsequent section of pricing analytics and how price optimization for retail helps businesses set up a price list for their next products.
What is pricing analytics?
Merchants should be very careful while dealing with the pricing because a slight change in the price can significantly impact your sales. If they are not careful, it could either increase or drastically reduce your revenue.
To help them decide the right price of the product, pricing analytics is always used by professionals.
Pricing analytics help the businesses get the desired tools that help them understand how pricing affects the overall business, inspect the profitability of some price limits and come up with effective pricing strategizing for generating maximum revenue.
Why is having an effective pricing strategy important for businesses?
Businesses in all sectors, starting from manufacturing and distribution to retail, can reap the benefits of pricing analytics.
Businesses that have a few products to start with do not have to worry about the pricing intelligence tool or do the complex retail price optimization. But businesses with a larger inventory and multiple products need to use retail price optimization to get the best price available and profit.
How can the pricing analytics help you increase your cash flow?
Having tons of data and not using them correctly is a waste of time, money, and resources. Hence the professionals should be able to reason about the past performance and then decide how to implement the strategies and predict the future performance.
Businesses can increase their revenue with the help of pricing analytics in the following ways.
Get more knowledge about the customers
Chasing the wrong target audience will drastically reduce your chances of increasing sales. Hence you must be clear as to who your target audience is.
Once you’ve identified your target audience, optimizing the price for the first time can be easily handled with tools like customer segmentation.
When you have aligned your prices with the customer segments, you’re sure to increase your revenue and profit. This way, the customers and the retailers are happy with the prices.
Optimize the product for its value
Most merchants decide the price of the product by using the “sounds about right” method. This method is wrong and should never be encouraged.
When the merchants use Wersel brand analytics, they will properly get an idea about the right price of the product. The insights a business would get with the Wersel Data-Hub will be more effective, as it will research other prices and decide an effective price.
It also helps you understand which channel will help you increase conversion
Pricing analytics can help the customers identify which source will assist them in increasing their conversions.
For example, if posting videos on YouTube might not help you increase conversions, having written content on your blog will attract more traffic; you must stick with the website.
This kind of information about which distribution channel will increase your conversions is easily highlighted by pricing analytics.
It can also assist you in planning promotions
The best method to gain more paying costumes is by having a precise promotion strategy in motion. Performing predictive analysis will help you decide the ideal time to start your promotion based on the current market scenario.
Several pricing analytics will help you get an estimate of how much you’ll be earning in retail price optimization. This helps you decide the discount rates and maximize the revenue. They also help you get an estimate of how much you’ll earn at different points in time.
We will get to the second part of our article promotions and help increase sales and improve conversion.
What is a promotion?
Promotions are attractive offers for potential clients that several businesses offer for a limited period.
During this period, depending on how the businesses have planned, the customers will either get the products at discounted rates or get some attractive rewards for shopping.
A business runs promotions with some clear goals set in mind, and with the promotion, they achieve their target of increasing sales.
Why do businesses give so much importance to promotions?
The main purpose that promotions serve is to help the businesses set themselves apart from their competitors. Promotions give clients an idea that your products will be sold at a lesser price than the maximum retail price (MRP), attracting more customers.
They include promotion when they have to sell a very unpopular item with a popular item. This helps them sell both items at the cost of one. By running a promotion, the business will increase its sales and get more investment returns.
How to optimize promotion for maximum profits?
A study found that the revenue earned from promotion is 13% more than revenue earned from sales and retailers. Hence, many utilize any promotional opportunity to their fullest during the holiday seasons.
The most important aspect of optimizing the promotion for maximum profit is to collect relevant data.
The initial step would be to decide what you want to promote and the reason for promoting it. Once this step is complete, the following step is to know where you’re planning to attract your target audience.
The third step is to properly design your promotion and decide how you’re going to launch the promotion. For example, if you have a new product, what other products will you give with it, or how much-discounted rates are you planning to sell your new product, etc.
The final step is to set aside a budget for the promotion and spend it with the budget. Being within the budget will help you know whether or not the promotion was a success or not.
How can businesses improve pricing and promotions strategies?
The following are how businesses can improve and learn from their previous data regarding pricing and promotion strategy.
Find previous mistakes
It is normal to have human glitches and errors. Your business might have encountered these as well. Hence you must be very careful while dealing with the mistakes made in the past.
Keep the mistake in mind and act accordingly while doing the pricing analysis and planning the promotional strategy.
Understand the price range in your market
Under some circumstances, it becomes crucial for merchants to imitate the prices of their competitors. Hence for business, it is crucial to understand price-matching dynamics.
You must know how the retailers react to the prices, discounts, and promotions of other retailers. This will help you develop a better price list, make good negotiations, and communicate without any misunderstanding.
Get more sales from your competitors
Find out which of your competitors is attracting more clients by offering their services at slightly lower prices. Once you know the competitors, you must talk with the retailers, as they will work a way out for this problem.
Once the retailers know the crisis you’re going through, they will develop some unique solutions to help you sell more products and increase your revenue than your competitors.
This was an in-depth understanding of how to improve pricing and promotions with the help of brand analytics. Retailers know that a difference of even a dollar would persuade the shopper to attrite to competitive site. Hence, they need an omnipotent pricing intelligence tool like PriceX to optimize prices of the products at the right time. It uses powerful MAP monitoring to get real-time pricing updates to particular products. This way your site will always display the lowest price and hence retain shoppers on your site. Our team at Wersel can get on a call to help you get started with integrating PriceX on your site.