Many internet marketers find that setting the right price for their product or service can be tricky. It can also be the difference in a successful online business and one that fails from the start. Because there is so much competition in Internet marketing today, it is of major importance that you be able to not only attract your potential customer but you need to hold them on your site from the first click. Getting a lot of traffic and page views mean nothing unless you convert them into sales, and how you price your online business products or services play a key role in that.
Do Your Research
Make use of niche marketing research to decide how you will price your product. Your potential customers tend to be driven by need and wants depending on their lifestyle and backgrounds. Many individuals who are budgeting look for the biggest sale or best discount. Other people look for quality over price. By tracking the individuals movements at your site you will be able to figure out what motivates your niche market
It is always a good idea to check out the competition in your niche market to get an idea what they are setting as prices for similar products or services. Even though all customers main reason for buying may not be the price, it is true that most individuals can’t pass up a great deal. It is not necessary to beat your competitions price all the time, but you will have to explain why your product or service is of better quality than the lower priced item. Pay attention not to price your product a lot higher or lower than your competitors products. If you charge to much people will buy from the competition to save some money, price it to low and people will often question the quality of your product.
You can think about developing different levels for your online business products with different prices. You can offer a basic, intermediate, and supreme package of product or service, for instance, charging a little more for the higher level service or product. This gives the customer the option of choosing what they want to spend while staying within their budget, and not go to your competitor. The tactic of providing more than one price point makes it more likely that one of your products or service packages will meet the budgets of most individuals across the board.
Using Promotions Discounts and Loss Leaders
Be careful how you use promotions and discounts. Properly timed and planed discount coupons, promotions and codes will attract customers in the hunt for a bargain or good deal, more so than everyday low prices. By giving too many discounts, coupons, sales, and deals you run the risk of spoiling your customers making them not want to pay full price for your online business product or services. They will prefer to just wait around until you offer the product or service on sale. A good method to keep this from happening is to keep your sales or discount codes exclusive to your established customers to keep them coming back, while continuing to get the regular income from new customers.
Incorporate the use of loss leaders in your online business. A loss leader is a product priced so far below it’s regular price that you will lose money selling it, but gain sales by attracting many more customers. Using loss leaders will increase traffic to your site also build interest in your other products. Another method to use loss leaders is to add them to other products or services. A potential customer is more likely to buy one product if it is bundled with another valuable product that has been heavily discounted.
From the information above we see that pricing an online business product or service is mainly done according to customer behavior. You shouldn’t shy away from adjusting your prices by considering the behavior of your customer base or niche market. By properly using competitive pricing, discounts, and loss leaders you will be able to set your prices so that you will have a successful and profitable online business.