Pricing & Promotions: The options are endless

Last episode I talked about business decisions having consequences and marketing solutions to them. One of the things I touched on was pricing but in this episode I’ll be diving further into using marketing to better understand the reaction to your price, increase the perceived value, and how you can run promotions and better position your pricing to a potential client or customer. ******

Welcome to the Digital Hive Podcast where we talk all things digital marketing. I’m Emma, a marketing strategist and coach for business owners who aren’t short on ideas but want support with the strategy and tactics to get their message out into the world.

In some businesses, you have the option of not providing a price publicly, on your website. This often suits those businesses which provide a unique price for a customised product or service. Others choose to capture a lead before showing a price. However, I have found that usually people want at least an indication that is publicly available, like a range or starting from price. This helps them to see if it is within their price range, and to compare it to other options. There are few things in life that we want to wait for a consultation just to see if it’s going to fit the budget.

We don’t often easily get feedback on our pricing from those who decline, but if you can, the most detailed and reliable feedback will be from those who are choosing not to go ahead, as only they can say what they liked or didn’t and why it didn’t suit them. Some won’t be as transparent as others, but you can always ask. You can also get feedback from people who do go ahead on what their considerations were around the value, risk, any hesitations and what helped them to decide and what took it over the line to signing up. This helped me to speak to those specific concerns for future potential clients, as well as to make sure I am always clear on the elements that got them over the line. Not every client will have the same hesitations, but once you know about one, why not allow for it?

If your price is shown on your website, you can test it’s influence on people’s activity. This can be done by tracking the viewing of that price and if that is where they drop off. This could be assessed by having it on another page, or having an element of tracking that is triggered when they scroll to that point on the page. Heatmaps can be valuable but there can be a more tailored and pointed tracking option. In Google Analytics that would be a custom event, but you can also look into your own tech stack and see what is possible.

If they don’t get to the part of the page, it’s probably not the price, you’re losing them early. Even if they do, this doesn’t mean you need to lower the price.

When providing custom or package pricing, this gives you much more leeway to play around with changing your pricing. While you’d be likely to ask for their budget, you can test the market over time.

One of the best ways is to give people two or three options. This can look like lower, middle and high priced options with the differences shown between, or it can look like a base with individually priced extras for them to customise their own package.

Let’s take web design as an option since it’s an easy service for most of us to understand. You could have three options, with a range of options of design features, so that could mean that the middle tier adds on forms for example, or embedded social media feeds, or more pages, and on the higher tier, your designer could also make patterns and illustrations for you which would be made for your website but can be used on other platforms for consistency. That might not be for everyone but could also be very handy, especially if that is their dedicated style.

It’s common for people to pick the middle package, but the popularity of choices can give you data to work with.

If you’re worried about your price being too high, and are offering a price online, you can try to add in a secret discount code to those who have shown interest but then not purchased.

Be mindful of how you do this, so that people don’t come to expect it, and click around your website and then not buy in the hopes they’ll be shown or emailed a code. A good place for this is within an email sequence, where after a non-converting website visit, you wait a few days and send an email that not only gives a discount, but shows off the best parts of that item or service. For a product business, it can be good to use a software that allows for a unique code that will expire and can only be used once.

If people buy at the discounted rate, and it’s a price you can make a profit with, you might consider lowering the price. You might also like to consider whether people like the fact they’re getting a deal, or if the urgency of a discount expiring is what got them over the line. In that case, you can run periodical public or secret discounts while not overdoing it to where even returning customers wait for a discount.

A flip side of this is to add an extra component but keep the price the same. This is seen a lot in online stores with gift with purchase, courses with added calls, mini courses or a book, and in services by adding an extra deliverable. This keeps the price the same while adding to the value.

Perception is reality. What people think something is worth, is what it is worth. But everyone might not agree. You can change their perception with your communication. We always want it to be truthful since word of mouth and reviews are so important, but you’d be surprised how often people undersell and don’t describe the best parts. Or explain them in a way that overwhelm people.

This can include a better understanding of the features, and more importantly, the benefits. The auxiliary components, like packaging, delivery method, or how you’ll keep in touch throughout a service can play a large part is the overall feeling of the offer.

It can also mean adding trust, with reviews, customer photos, as well as options for guarantees or returns and refund options.

Some brands like to lean into the aspirational elements or how the offer matches their lifestyle. Some lean into the stories of what purchasing this offer says about them.

Emma Lewisham skincare comes to mind here since it’s a new thing for me. Not only does the product help with my redness, they are good to my skin, but they also offer a fabulous refill option, that I’ll definitely be using.

For me this says I’m making conscious decisions that aren’t me vs the earth. They’re not using zero carbon because the outer packaging is permanent, and there’s travel for the product to me and the used containers back, but at least they’re taking control of the otherwise wasted packaging when I’m done with it, instead of it going to landfill, possibly masquerading as recycling in between.

This is part of their brand story, but the refills are also a few dollars cheaper so the lesser cost of packaging, or at least I assume it’s cheaper for them, is passed on to the customer. It also means the outer packaging is a great quality and built to last instead of being durable but used temporarily.

The added permanence adds luxury. And realistically that’s just the packaging, not the science of the skincare which has it’s own story, one that I wouldn’t be able to explain as easily.

So what does purchasing your offer say about your customers?

I often talk about campaigns, but a promotion is a price based campaign. It’s something to talk about, and create urgency, but shouldn’t be overdone so people don’t wait too long for one.

For retail, a sitewide sale or choosing specific ranges to run a promotion on can bring people back, or allow people to lower their investment to try your brand for the first time.

One of the most important parts of a promotion is that it’s easily understood. Having if this then that is fine, but if this, or this equals this and this equals another thing, it’s all too much. Not only is it harder to set up, if it isn’t understood, people will be turned off and not purchase.

You can choose between discounts like 20% off, free shipping, multi-buy offers like Buy one get one half price, gift with purchase, or discounting when they purchase on a subscription.

There’s also loyalty programmes, where coming back over time adds points that can be spent, or provide exclusive access. Just make sure you make it sound more interesting that earn points, spend points, which seems to be the go to template.

You could offer colour ways or styles for a limited time only, possibly still at full price, or on pre-order at the discount, since you won’t risk being left with excess.

While some brands choose to run regular discounts, others choose to have always on promotions in the mix as well. As a clothing brand, having a discount of 2 pairs of pants, possibly within a collection for a set price, or discounting a bag strap when buying a bag can be a great way to showcase your brand and have a regular message around pricing and your range.

This can be more rare in service based businesses, but you can think outside of the box in what you offer. I know of one web designer who would run an end of year sale where people could buy a package of maintenance hours for the following year at a discounted rate.

There’s also the option of offering a discount on follow up services, so their first project is full priced, but you reduce the price for other services since you have done the introductory, getting to know you pieces, as well as packaging services together.

The regularity of these promotions is up to you. And again, it’s all how you frame it. A once a year customer appreciation sale is a very different value proposition than a monthly sale.

If you’re selling well and thinking of raising your prices and want to check the effectiveness of this, it can be even trickier, but a time will come where you need to. Inflation and rising costs mean that this has to happen sometime. I’ve found it’s best if done on a regular basis, like annually or every 2 years since a small raise is more acceptable than a large one. You can choose to do this without warning people but when you communicate with loyal customers or ongoing clients in advance, you can add some framing to position it well. You could allow them to buy at the current rate for a small amount of time, since it can add urgency without really adding much work for you. You can explain why you’re increasing your pricing and how long it’s been since you last did. That heads up can mean that you further build trust and gain more of their loyalty.

This is a lot to consider, but I hope this helps you to see that there isn’t only one option with pricing once you get beyond the math of what is profitable.   I hope it also gives you a bit of an idea of how you could run a promotion and see how you could get a few different people over the line or get different feedback on your pricing.

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