As a self-professed retail geek, I’m always noticing prices and deals that retailers offer. More than that, though, I notice what these prices really mean. What are you saying to a customer when you set the price of a product? It’s a good question, because you end up saying a lot.
Price is, of course, one of the central touchpoints of retail. But it’s a lot more complex than it seems. The customer wants to feel good about the amount they paid for their purchase, and while this can mean that they feel like they got a great deal, it can also mean that they feel like they paid a fair price for a premium product. If your customer feels like a high-quality product is priced too low, they might start to doubt the quality.
Therefore, understanding your customer base is just as crucial to pricing your products. Similarly, a surprising amount of retail pricing is based on “gut feel,” or simple tradition—if we did it last year, why not do it again this year? Well, maybe you should, but really look at the data and decide actively.
So, after hearing about all the things you shouldn’t do, what should you do? It all comes down to the need for a strong and specific pricing strategy. Don’t confuse or mislead your customer with your pricing, but instead make sure you have specific reasons for the prices you set and the deals you offer. Think specifically and strategically about your pricing decisions.
On your way to creating your pricing strategy, there are a few key points to keep in mind. These common mistakes are easily avoidable, but often the first step to eliminating them is just being aware of how they affect your customer.
At the end of the day, this last point—keep it simple—is what it all comes down to. You want your customers to always know what they’re getting from you, whether that be price or quality of your product. Customers want to feel confident when they shop with you, and setting reasonable prices and exciting—but clear—sales is the foundation of that kind of confidence. If customers can’t trust the prices you set, they won’t trust your business—but if they know you set fair prices, offer good deals, and always communicate clearly, they’ll know they can trust you, and will keep coming back.