Adjusting prices to the competition sometimes becomes a complicated task, especially in terms of retaining profit margins. Thanks to the monitoring of competitive prices, online sellers track and compare the prices with which the other brands play, allowing them to make fairer and more accurate decisions in their pricing strategy.
However, when it comes to adjusting down prices, it is necessary to take into account certain aspects that allow you to get the most out of market knowledge in real time without falling into the depreciation of the product itself.
When it comes to competing in the online market, it is possible to adjust the prices without losing the profit margins of the brand taking into account the following tips:
Select with criteria the products to which your price will be modified. Apparently, a most obvious process, but the choice of a wrong product or extra polar cut to the entire catalogue will significantly reduce the benefits of the brand. The key to positioning the brand as the best price without losing profits is in the product of first necessity in the market or those that have a growing interest.
Cross-selling with other products. Accompanying the product that has been reduced in suggested price by related products helps to improve the sale margin of the main product. The objective is to encourage the creation of tickets with a greater amount to compensate the adjusted prices.
Offer accumulated discounts or limited offers. If the price adjustment corresponds to a specific need, in principle, this should not be a sufficient enough reason to modify the permanent price of the product. Given a temporary motivation, it will be more attractive for the customer to offer accumulated discounts for the purchase of several units.
Reflect on if the price will be appropriate in the medium and long term. Analysing the prices of the competition should serve to redirect a dynamic pricing strategy in the mid-term. In this way, the brand will be recognized as the most attractive price due to the conditions in which the sale of the product or service occurs, and the increase in transactions will compensate for the price adjustment.
In any case, before making the decision to change the price of a product it is essential to analyse the number of customers that would be affected by the change and in what economic sum their purchases would be translated. These customers are already willing to pay the price set for the product, and in this decision other elements of the brand have been included such as customer service, the quality of the product itself, its benefits or even the guarantee offered by the seller.
In this case, if you want to gain relevance with the customer, it is advisable to start other added service strategies that can compete against the most attractive prices. A very simple way to reward the customer for their purchase without suffering the loss of margins is to include the shipping and return charges or offer an express discount for a future purchase.
First of all, it is essential not to fall into the constant downward trend of prices, one of the most frequent errors in pricing strategies. Regardless of the benefit of each of the brands, the monitoring of the competition has its reason for being in conjugating the profit margin for the sale with the price that consumers are willing to pay for the product. As in so many other occasions, virtue is found in balance.