10 Ideas for Better Price Management in E-Commerce
- Spend time to identify value drivers: why should customers buy from you rather than from an online competitor or an offline competitor. Turn this insight into pricing action. Be worried if the only insight is that customers should buy from you because you are cheaper or offer free delivery.
- Build a model for your pricing that can be automated - but build safe-guards (see competitor prices)
- Make sure your software tool can both update prices daily, if needed, and be used for simulating prices & profitability before committing to the website.
- Include competitor prices in your model, but avoid getting into a negative spiral of you lowering prices when your competitor does and then they do the same when you lower your prices (all within the legal boundaries of non-collusion of course).
- Segment your products based on velocity, and use that segmentation for pricing. Update segments frequently.
- Run price promotions for short periods. You have no real costs of changing prices, so do so frequently.
- Consistently analyze price promotions for ROI. Use insights to promote where and when it matters, not just all the time.
- Gather as much data as possible about your customer and visitors to your site. Knowledge can help you price better.
- Differentiate prices (and offers) for known/registered customers and anonymous customers.
- Segment customers and use those segments for pricing. Update segments frequently.
