Online Business Pricing Strategies

online business pricing

For most businesses that sell a product, a significant portion of sales come from repeat customers. After you put in the effort to get customers to visit your website and make an online purchase, it’s time to start working towards bringing them back. One major way you can accomplish this is by using smart online business pricing strategies for your products.

The Benefits of Repeat Customers

In 2015, RJMetrics posted a study on eCommerce buying behavior. They found that 32% of customers who make an online purchase are likely to come back and make another purchase within a year. Although this doesn’t seem like much, repeat customers tend to also come back again. If someone makes a second purchase, they jump to a 50% chance of making a third purchase. This continues incrementally, leading to a statistic that shows that return customers can be very loyal. If you make an effort to develop customer loyalty, you can increase your sales greatly and make everyone happy!

Use Smart Online Business Pricing Strategies

Smart online business pricing strategies can be a powerful tool in helping you bring back repeat customers. These methods reward customers for choosing your store again and again. There’s more to it than simply passing out coupons. Here are some simple pricing strategies to try for your online business:

Delayed Rewards

People love rewards and will go out of their way to obtain them. Although you may draw in many first customers by simply distributing coupons and offering a reduced price on a first purchase, this method doesn’t necessarily bring people back for a second buy. In fact, the customer might feel upset when they realize that they now have to pay more for the same thing they purchased before.

Instead, give a reward for a purchase by offering a discount on the next purchase. Rather than handing out $5 coupons for a first purchase, offer a $10 discount on a second purchase. This has two major benefits. First, it brings more people back for a second purchase, which can snowball into customer loyalty. Second, the offer doesn’t have to be limited to first-time customers only. This makes your business look really good to repeat customers, and may even bring back buyers who weren’t originally planning to make another purchase.

Instant gratification is great, but delaying the reward can be even better for your business by drawing in repeat customers.

Reward Certain Actions

You can make customers feel more involved and recognized by giving out rewards for doing certain things that benefit your business. You can reward many types of actions, such as:

  • Coming back to make a set number of different purchases.
  • Purchasing the same product repeatedly.
  • Purchasing several different items at once.
  • Spending specific amounts of money.
  • Joining a monthly subscription.

A good example of this method is Target’s Cartwheel app. When you are checking out at Target, you can use the app on your phone to scan the items you’re buying to earn extra savings. It also includes a badge system, letting the customer feel like they are progressing towards extra rewards on top of saving money.

This kind of reward system makes the customer feel good while shopping at your store. The rewards don’t even have to always give discounted prices. Many people will return to a store that makes them feel good and have fun while shopping.

Membership Pricing

Other common and beneficial pricing strategies include memberships. Having a key ring full of membership cards is a hassle, but these days you can easily handle memberships online. Grocery stores often use memberships to bring in repeat customers, and the system works well. If a person can buy a product in one place cheaper than another with a simple membership, they are much more likely to return there.

Keep your members feeling special by setting up great exclusive rewards. If you regularly change which items are discounted to members, they will keep coming back to see if the items they want are currently on sale. This will also entice new customers into membership if they see something they want at a cheaper price. You can also set up different membership tiers that offer greater discounts at higher levels. Another great option that combines the previous two methods is to have members unlock higher tiers of savings by making repeat purchases.

Not all of these methods will work for every business. Consider which pricing strategies would work best for your online business before setting up a lot of discounts. If in doubt, you can try several methods over a period of time and see which work best for you. If you want to learn more about improving your online business, check out VMA’s other blogs such as this one that goes over different ways to use content marketing to boost online sales.