If you’re planning to rock the holiday season this year, then you better start thinking about your pricing strategies. This is because pricing is an important factor that customers use when comparing sellers, and the better your prices, the more appealing you are next to your competitors.
The average formula of offering items at the lowest prices might sound tempting at first, but it doesn’t always work. We understand that you know what price range best fits your business. However, there are a few significant factors that you should consider before settling on a final number.
1. Check historical data
The best way to decide the price of your items is by looking into your historical data. Your last year’s sales report during the holiday season will tell you a lot. Consider key indicators such as your best-selling items, customer demographic details, high-margin items, and day wise sales to help choose the right price for the present year.
2. Calculate your holiday costs
When you calculate price, you also need to take your costs into consideration. Your administrative, salary, and marketing expenses during the holiday season should be factored into the market price. This may seem like common knowledge, but it’s important to remember that your expenses around the holiday season may fluctuate. Be prepared, and ensure that your price covers the cost of production
3. Look at your competitors
Your pricing plan can also be largely influenced by the prices your competitors are offering. Visit their website, and keep close tabs on their promotions. This will help you spot a competitive advantage. If possible, keep an eye on the inventory levels of your competitors as well. If their items go out of stock, you have the opportunity to increase your prices and reap higher margins.
4. Use pricing strategies
A strategy like price anchoring, where you display a higher price and then replace it with a lower one, can attract a good amount of attention. Similarly, a lot of vendors show an expensive alternative with low and mid-range variant. These variants could be your own products, or they may be sourced from different sellers. In this case, consumers are drawn to the middle option, so it’s good to make sure your price falls within that range.
5. Run promotional plans
A good strategy during the holiday season is running special promotions for your existing customer base. Identify your regular customers, and send them a personalized email with a special coupon or discount code. Not only does this show your appreciation for their loyalty, but it motivates them to buy from you again.
6. Create bundles
You can bundle your existing products together and offer them to the customers with attractive labeling and packaging. To boost the chances of selling these bundles, plan and earmark special days during the season to launch them. A lot of retailers also advertise these bundles as “limited edition”, since this combination of products may not be offered again. Using tags like this makes these products more appealing
Since there’s a lot to be done when preparing your business for the holidays, it’s easy to get lost in the pile of work. But we’ve got you covered. Check out our holiday resources, that include an ebook, video, and a few webinars, to help you get everything in order for the upcoming season!