4 pricing strategies to help you master the secrets of pricing and closing deals!

In the process of our retail and service, a core factor affecting transactions is price.

Many times, it’s not that the product is bad or the service is inadequate, but that the pricing does not impress consumers.

The most common form of price we encounter is a fixed price, which is particularly prominent offline, such as when we go to offline supermarkets and small shops.

As you can see, the more online the retail, the less chance of bargaining you will encounter, whether it is live streaming or purchasing directly in a store.

But offline, except for general chain supermarkets, many business formats still have room for bargaining even if the price is fixed.

If you allow customers to bargain with you, you should pay attention to having a psychological price when setting a price.

Today we are going to talk to you about pricing strategies for daily retail. We hope that in the future you can tailor your pricing to suit different items and different situations.

1. Four Pricing Strategies

1. Identity Pricing

There are real examples in our daily lives. When we take the bus, subway, or high-speed rail, children, the elderly, and students can enjoy different prices. Some scenic spots also have additional discounts for special professions such as soldiers, teachers, and tour guides.

Of course, from the perspective of the product or platform, we generally set prices based on the user’s membership level.

For example, in social e-commerce platforms, different membership levels can enjoy different prices and points deduction policies.

In fact, it is not just shopping, some online paid communities can also specify different renewal prices based on payments made by new and old members.

The core purpose of identity pricing is to make users aware of the importance of membership, cultivate users' consumption habits, and deeply bind them to the platform.

2. Time Pricing

There are two methods for pricing based on time: one is dynamic pricing, and the other is limited-time pricing.

There are also two pricing methods for dynamic adjustment: one is the price reduction method, and the other is the price increase method.

The price increase method is easy for everyone to understand. For example, if an event lasts for 10 days, the first day will be the cheapest, and then the original price will be restored on the last day.

The price reduction method is suitable for specific industries. For example, a fresh food supermarket adopts the price reduction promotion method, and the core focus is freshness.

The price decreases according to the time from morning to night. For example, groceries are 10% off in the morning, 15% off at noon, and 40% off after 8 pm.

The prices for limited-time price adjustments are relatively fixed. One is the promotional price, and the other is the regular selling price. The main ways to play are flash sales at the top of the hour and limited-time flash sales.

The hourly flash sales refer to the purchases made at fixed time points, while the limited-time flash sales refer to special discounts within a certain time frame, but the price remains the same.

3. Quantity Pricing

"Big quantity discounts" is a slogan we often see, and it is also a common pricing strategy online.

For example, when we buy seasonal fruits online, 5 kilograms costs 20 yuan, 10 kilograms costs 30 yuan, and 20 kilograms costs 50 yuan.

In addition, for example, when we recharge stored-value cards offline, pay membership fees, etc., this method is also suitable.

4. Package Pricing

From the user's perspective, many products are too expensive and not cost-effective if purchased individually, but are not needed if purchased in excess.

Therefore, we must give users a reason to place an order to help them reduce the decision-making process of placing an order.

In fact, when pricing a package, the most important factor to consider is the products that come with the package. Different matching logics determine the sales volume and profit of the products.

a. Hot sale + hot sale

Here we should pay attention to a misunderstanding. It is not the case that as long as a product is a hit, it will definitely sell well. The practicality for users must also be considered.

b. Hot sale + matching style

If you sell clothes and a coat you recently bought is selling very well in winter, then for customers, thermal underwear, sweaters, and pants are the matching items.

Villagers who often go to the supermarket to buy instant noodles should have encountered this situation: water cups, sausages, and drinks are sold together with instant noodles.

c. Popular items + ordinary items

For the normal package bundling strategy, it is actually not recommended to use the strategy of hot-selling + hot-selling. This approach is only suitable as a temporary benefit during events such as openings.

The normal operation should be to drive general products through hot-selling products, which can be understood as clearing inventory.

But this approach must also ensure that the quality and value of the goods are not a problem.

d. Hot sale + profitable sale

Generally, hot-selling products pursue small profits but quick turnover, and even act as a traffic generator.

Therefore, in the combination of the package, a certain profit margin must be guaranteed through the sale of profit items.

In the process of customizing package prices, the two most important points are:

One is to ensure sufficient profit margin

The second is that users enjoy real benefits

Next, we will give you some specific examples from actual business processes to help you review and think.

2. Specific examples of the four types of pricing

1. Nine-point strategy

Now think back to Xiaomi. Almost all of its products have the number 9 behind their prices.

For example, the first few versions of Xiaomi were priced at 1,499 yuan, and the latest version is priced at 3,999 yuan.

In addition to Xiaomi, we also encounter various prices with 9 when buying clothing, small appliances and other products offline.

There is a very subtle cognitive illusion here. For example, if you sell a product for 999 yuan or 1001 yuan, the difference is actually only two yuan.

But in the users' minds, one is still priced at a hundred yuan, and the other is priced at a thousand yuan, so users will have psychological barriers when making decisions.

In addition, Chinese people have a special worship for the numbers 6, 8, and 9, believing that these are numbers that bring good luck and they are more psychologically accepting of them.

2. Zone strategy

The purpose of creating a price zone is not only to differentiate users, but also to help users find products quickly and speed up their ordering decisions.

Sometimes the clearer the price, the stronger the user's desire to consume.

For example, if there is a special area in a shopping mall with a price of 9.9 yuan, then the user’s psychological consumption expectation is 100 yuan.

Then the user will think that buying 10 pieces will only cost less than 100 yuan.

3. Full discounts and full gifts

The core of this strategy is to increase the user's order amount. When implementing this strategy, pay attention to the following two points:

a. The threshold conditions should be reasonable. It is best to set a step threshold, such as 50, 100, or 200.

b. The preferential policies that meet the conditions must be good, such as 20 yuan off for purchases over 50 yuan, and 50 yuan off for purchases over 200 yuan.

4. Combination Pricing

When we buy oranges offline, we often see them sold at roadside stalls for 10 yuan per 3 kilograms.

This pricing strategy not only guarantees sales but also makes users less resistant.

Just imagine, one scenario is that you go to a store to buy oranges, and the merchant tells you that it’s 4 yuan per pound. When you are ready to buy, the merchant says you must buy 3 pounds, or the merchant keeps recommending that you buy 3 pounds. At this time, you feel quite resistant.

But another way is to directly package the three kilograms, 3 kilograms per bag, and sell it at 10 yuan per bag.

Or if you write a sign in advance saying three pounds cost 10 yuan, users will not ask you how much it costs per pound.

In fact, in addition to selling oranges, we also do the same thing when buying 5 pairs of socks offline for 10 yuan.

This pricing strategy is also very effective online. There is also a random combination pricing sales strategy.

The whole store sells three items for 10 yuan and five items for 20 yuan. Users can choose as they like without any restrictions.

This method gives users more options and also encourages users to place orders.

3. 5 things to note when pricing

Pricing is not static, and the core is to be based on our current purpose.

If the purpose in the short term is to increase sales through promotion, or to target competitors, etc., then we must carefully study our pricing strategy.

In the actual pricing process, we must also pay attention to the following five special factors.

1. Crowd

Identity is not only a factor we consider when pricing for users, we also guide pricing strategies based on user preferences and spending power.

For example, set up some price zones to actively differentiate users' consumption, such as 9.9, 19.9, and 29.9.

2. Season

Always pay attention to the impact of seasonal factors on commodity prices, especially the pricing of counter-seasonal products.

For fruits, off-season products have higher prices, but for clothing-related products, off-season products have to be promoted.

3. Competitors

For most non-branded products, users will care more about price comparison.

Even for homogeneous products, users will compare prices from different stores.

How to avoid users from comparing prices? The membership strategy and package strategy we mentioned earlier are more suitable.

4. Scene

Generally speaking, the price of a commodity is constant, which we generally call the regular selling price.

Prices will only be adjusted during holidays.

For example, store anniversary, membership day, big promotion day, etc., so the core is still to set prices based on our different scenarios.

5. Gross Profit

The purpose of business is to make a profit, so we ultimately have to consider whether we are making money.

Pricing cannot be simply understood as price reduction or excessive subsidies.

It may lead to a surge in sales and customers in the short term, but we still have to consider users' subsequent repurchases.

Finally, I want to say that price adjustment is a marketing strategy.

However, frequent price adjustments will affect users' value anchoring of products, thereby affecting their consumption decisions.

Above we discussed the pricing strategy for daily retail goods, but when it comes to the pricing of large items, including consulting services and community services, there are other ways to play.

For example, if a social network wants to charge fees, it must dare to charge fees and set high prices.

The first is to screen users, the second is to facilitate the provision of high-value services, and the third is to improve service efficiency. So later we will talk about different pricing strategies around different businesses.

Okay, that’s all for today’s sharing.

Author: Shili Village

Source: Shili Village (shilipxl)