Making Sure Your Pricing Strategy Attracts Buyers
Customers want their shopping experience to be as easy and as personalized as possible. In order to make a good first impression, however, you need to focus on the price that you set as it is the very first thing that a customer sees and it is what encourages them to ask further questions. Therefore, if you want you want to make sure that it catches their attention, you need to make sure that you are offering the best prices at the perfect times as they can easily compare prices via a number of different price aggregators. Only when you have set a solid price point should you begin worrying about aspects such as delivery and customer support.Now, the best way to convince your customers that you have the best price requires creating the proper price perception. This means that your pricing strategy needs to be equitable, customer-centric, and consider copious amounts of variables. Variables include aspects such as the needs and desires of customers, rival prices, as well as your own objectives. However, managers can no longer handle every single piece of data that they need in order to make pricing decisions, not to mention the fact that they’d have to do so in real-time while also engaging customers. As a result, instead, managers should focus on the flow of communication between buyers as well as construct customer-centric marketing, promotional, and pricing strategies that are powered by data while technology, on the other hand, will focus on the repetitive, mundane tasks. However, how does AI improve pricing?
In order to create both data-driven demand predictions as well as price suggestions, AI analyzes an unlimited amount of information regardless of the amount of pricing or non-pricing parameters. Afterward, it uses its “sandbox” in order to forecast the result of each pricing decision. In addition, the algorithms are able to debug, repeat, as well as scale any of the pricing decisions that are a success with customers.
Based on research by Deloitte, artificial intelligence is now more refined and less costly. Therefore, retailers in the UK, for instance, have been using it to improve upon things such as pricing to make their customers’ experience better. They can also use it for things such as chatbots that are directly in contact with the shoppers or for algorithms, which utilize customer behavior and purchasing history data in order to predict what the future customer needs will be while offering the items or services at the best price point. You can ensure that you have the best prices through balanced pricing as it helps boost your marginality. It is also beneficial because it considers how sales of various items depend upon changes in prices. Find Me a Gift, for instance, which is an ecommerce retailer based in the UK, had given their pricing strategy a makeover by utilizing artificial intelligence. Through it, they wanted to make it more customer-centric that way they could capture customers’ attention by offering the best prices.
Initially, the Purchasing and Product Development Senior Manager, Jean Grant, had stated that “We were running around like busy fools selling lots of stuff but we wanted to find a way to make each pound work harder for us.” Therefore, they started to collect and structure data from the previous couple of years including the sales history, macroeconomic data, and Google Analytics, while also competitively tracking data such as prices, promotions, and stock. In addition, they optimized prices via Competera’s machine learning algorithms. In the end, they were able to boost sales by 22% and increase profit margins by 14%, despite the market being quite extreme.
Since UK consumers now await a customer experience that is more gratifying, retailers have to make sure that every single buyer interaction, such as the price, is driven by data and effectivity. AI is able to utilize copious amounts of data in order to suggest prices and forecast customer behavior, assisting managers in coming up with attention-grabbing offers so that they can reach the hearts of their customers.