In the previous article about conversion rate optimization we focused on basic steps you should take to improve conversion rate on your website.
We would now like to take this topic further and focus on the relationship between pricing techniques and conversion rate optimization.
When optimizing your website design, colors, fonts and images, you should also include product price optimization techniques in designing your conversion funnels. Optimizing your pricing during the entire shopping process can be very beneficial for the whole store.
Do you know how users behave on your product pages? Are they possibly looking for some specific pricing information? Is there a visible price tag on the product page, in the cart and on the checkout page? Do you measure how many people looked closely into the price description and still failed to complete a purchase or had questions?
Pricing is one of the core elements of product marketing and all of the questions we’ve just mentioned matter to your potential customers. Conversion rates get a boost when all pricing elements fall into place.
Pricing techniques for achieving higher conversion rates
1. Dynamic product pricing
Setting optimal prices for your products is an essential business technique that helps gaining customer attention and trust. E-commerce offers a big advantage of pricing products in real time and reacting on the actual demand. Work with dynamic pricing and price elasticity in mind and change product prices depending on your market behaviour. FutureMargin offers a solution for price optimization that is based on analyzing and evaluating your historical conversion data.
Discount pricing strategies can drive your whole sales strategy. Choose from many different discounts and offer special deals to your new or loyal customers. Customer value, product lifecycle, seasonal or bundle discounts are some of the most used discount strategies in e-commerce. More examples include discounts to keep visitors from leaving the site, improving cart checkout rates and customized e-mail marketing campaigns with discounts based on user profiles.
3. Pricing page layout
Do you have a specific landing page dedicated to pricing details? Make it simple and structured for the visitors to compare and understand before they process the payment. Invest time into studying their online behaviour and redesign the page if needed.
Power your optimized pricing pages by using high quality images, video descriptions or reviews made by your current customers. Visitors often compare products and look for more information and thus relate more to the specific price offer.
4. Communicate price clearly
Define the price you're asking for and communicate it clearly, especially on landing pages. Include all information about what’s included in the price, so it is easy for the customer to understand what they're buying. Customers want to see the total value they are going to pay during the whole shopping experience: from a teaser banner, throughout a product page, on the shopping cart page and finally when they're about to checkout and pay.
5. Geo-targeted pricing
Optimize your prices geographically based on where the customers are visiting from. Website users have different product expectations and local competition always plays a big part in the decision making process.
6. Learn pricing strategies from top retailers
How many products should be promoted on your homepage? Should you round prices, or use precise cent values? Find more about pricing strategies from top retailers pricing strategies from top retailers that help converting visitors into customers.
Have you already applied some of the recommended pricing techniques? Don't forget to test, measure and evaluate the conversion rates. Whatever conversion optimization scenarios you implement, always A/B test optimized pages by using a free tool like Google Optimize or invest into advanced paid tools like Optimizely or VWO which provide detailed insights.
Conversion rate optimization is a broad strategy to improve your sales and profits. Optimizing your pricing techniques is an important part of the process. We also recommend looking into optimization of website design and speed, images, video or audio files, site's navigation or structure, copy of product texts, calls to actions as well as all security elements. Last but not least, always measure conversion rates and continuously test different versions of your page sections.
FutureMargin is machine intelligence tool for ecommerce stores. Using historical sale, visitor and margin data, FutureMargin can be used to improve your e-shop product pricing and profit and improve inventory levels. Available integrations: Shopify and API.