The age old question continues to come up time and time again – ‘should I price my product online?’ Which is usually shortly followed up, with ‘my business is different because I sell this product, and this product’s consumers are different than everyone else’s’. We are here to tell you, unless you are selling a product that only pulls in an audience from another planet, and your product is the only reason why they shop on Earth, your potential customer does not shop any differently than they shop anyone else’s product. It is time that your business realizes that not pricing your product online – whether you’re selling widgets or widget polishing and everything in between – is a BIG mistake.
As you know, UpShift Digital has worked a lot with the automotive industry, which in the online space, tends to be several years ahead of many other industries. Pricing inventory online was a big challenge to convince car dealers to do as well. But go online and look around, unless it is one of the most out of touch dealers in the world, they are all pricing their inventory – new or used – and merchandizing it enough to justify the price. There’s two VERY important concepts in that line – pricing AND justification – you can’t just turn around and price every widget you have, with no description whatsoever about the widget – content is very important in the merchandizing game. (We will admit, dealers are still working on that concept).
What did we learn from the auto industry? We learned that there are two main misconceptions about consumer behavior when they are shopping online. And the misconceptions are not ‘a little off,’ but in fact they are the complete opposite of the truth. It is time to ignore that little voice in your head, and research what consumers do when they shop online, and in every other step or “micro moment” in the consumer journey. Notice I said, ‘consumer journey,’ not ‘sales funnel.’ In every purchase cycle out there, the road to the sale is no longer as simple as a funnel. There are many paths, and influencing sources that customers use while on and off-line – and it is extremely risky to assume that those sources line up in any order. But the commonality is information – influencing, educational information. It’s research folks – the consumer journey is the path of research.
Misconception number 1 – if I do not price my product online, consumers will assume that I am willing to negotiate or have a lower price than other businesses or competitors that do price online. FALSE! It is actually the complete opposite opinion. If you do not price you product online, you are first off likely to be completely ignored. Price is a key influence ingredient in the consumer journey – if you don’t provide that ingredient your business is quickly removed from the universe of consideration. The first thing that gets you crossed off the list – no matter how amazing your website is, your reviews on Yelp are – anything – first thing to get you crossed off the list. What your consumers are more likely to think, if you are not willing to price your product, is that you pricing is higher than your competitions’ and by showing that price online you will not actually be able to compete. This goes for cars, mattresses, houses, pet food, you name it. This especially goes for brands of products that can be purchased at multiple locations – including local stores and nationally owned big box stores. Now if you do sell something higher than your competition – so be it – you do that in your store too – justify it – WHY is it higher? What else comes with it? How is your service before and after the sale different? Why are you worth the extra money? If you don’t have this conversation online with your consumers, they are having it with someone else.
Not only do consumers likely think your price is higher than the competition, if you do not include pricing, they often feel like your store has something to hide. This sub-point is especially true if you are a local seller and competition against national outlets in your town that sell the same product. Consumers are informed and educated – they know what buying power is. Because of that, those consumers are already thinking that you don’t have the access to the same pricing as the bigger, national stores do, and therefore, you don’t want to scare them off by pricing your product. And additional dangerous step is to not price your product and link to the national manufacturer website of the brand, that is likely sold at big box stores in your town and online. Those websites have pricing online – that phase of the research process has now been competed, and it was done so without your store in the game.
Misconception number 2 – if I don’t price my inventory, my consumer will call, email, stop by, somehow contact me to ask what my price is. No, that’s absolutely NOT what will happen. People are busy. That’s why they are using the Internet – they don’t need to take the time to call any more. When we first started working with this misconception amongst car dealers, two forms of contact (outside of a store visit) were still prevalent – calls and emails. Now the reality is, neither of those forms of contact are relevant, but especially not email. If you don’t have a price, and a description, on your website, along with every piece of inventory you are displaying for sale, your potential customer is going to bounce from your site. They MAY try two different products, thinking maybe their first choice was the only thing on your site that was not priced. But when they find item number two, they are gone – never to return. Don’t believe us that that is how it happens? Look at your website analytics. Where do your customers exit the site and how long does that exit strategy take? This is a step beyond your homepage bounce rate. If everyone is bouncing from your homepage, you have other issues. But if they are making it to inventory pages – consuming one or two pages – with extremely short time spans – single digit seconds – you are chasing your customers away.
So the reward with pricing your product online is that consumers will more likely shop you, and more likely include you in the consideration universe once they have reached the point of purchase. That the point where other business differentiation is important – like special services – and your business’ online reputation, but those are different topics for later days. Are there any risks associated with putting your prices online? Sure, of course there are, but they are minimal compared to the reward. You may have some customers that use your pricing and your product as ammo for a store that is closer to them, or that they have perceived that they would rather do business with – a risk that will impact a local store vs. local store competition more than local store vs. national big box store. It is still true that local consumers would rather shop locally owned stores, the misconception of those consumers is simply that the big box stores can provide better pricing and equal ‘before the sale’ service. Very few consumers really think that the national stores will care about them after the sale though. Notice the key ingredient in that thought process? Yes, you are correct – price. Consumers are willing to put up with big box store service, if the price is worth the pain. Put that one in the reward column – pricing my store’s product online will increase my chances of ending up in the final consideration universe, if the consumer believes that my service is truly locally good.
As you can see, there are truly few risks and there ARE great rewards to pricing your widgets and your widget polishing online – no matter the product – to compete, you must provide the most basic research metric to your consumers. There is work to do – you have to price your inventory, you have to know how to price your inventory – meaning you have to know how everyone in the market is pricing their inventory. And you have to justify – high, low or right on target with the competition, you have to justify the price of every item you are displaying online. Does that sound like a lot of work? As the key in including your business in the final consideration universe of businesses that your consumer plans to purchase from, it is simply a required step. If you plan on staying in business, pricing what you have for sale on your website is a mandated rule.
UpShift Digital is happy to offer assistance in creating your pricing strategy. Contact us through this website, and we will set up a time to talk to you, and offer customized suggestions.