E-commerce businesses face a very strong competition due to the fact that SMEs have entered into the online world almost as quickly as the biggest companies, such as Amazon or Alibaba, resulting in the existence of millions of e-commerce companies.
This great competition is not just focused on who sells something, but also on the earliest stages of the buying process, like getting customer attention when they are just looking for information prior to buying. E-commerce competition is one of the best examples of Porter’s framework, since online buying decisions depend on many factors that are hard to control. So we can think about making sales in e-commerce like a multi-stage mountain that e-commerce businesses need to climb to win the competition.
In this article, we will explain how pricing affects e-commerce competition and show how to become more competitive by getting smarter about it, in order to boost the marketing ROI of e-commerce companies to get and keep their customers.
Offering Attractive Prices Is Mandatory for Businesses of All Sizes
Any good marketer knows that the key to success is to be able to put himself in the shoes of the public. This is why marketing is so closely related to data analysis. Ideally, a good marketer will merge the information from data with his own experience to understand what the customers are thinking when they are about to buy. And there is one thing in which almost all marketers and customers agree: price matters! And here are some facts that support it:
- about 25% of e-commerce website traffic comes from comparison shopping tools,
- 90% of online shoppers compare deals on the Internet,
- 6 out of 10 people state that pricing is the top factor in purchasing decisions.
Competitive prices will result in more traffic into your website. If people are researching deals and best prices, and you are offering the best ones, your business will appear at the top of the searches that customers are doing during their research.
Besides, pricing is not just a way to get more visitors by taking advantage of the price comparison engines available online and some sporadic sales, but it is also a way to make visitors loyal shoppers.
And it will improve the performance of other strategies that you may be developing, like for example pay-per-click advertisements. A common problem of pay-per-click ads is that the customers do click in the ad, but they also look in many other sites, so they end up buying from a competitor, while you have to pay the ad publisher by the click. But if you are offering the best price, this is a very unlikely scenario. And your conversion rate when someone clicks in the ad and lands on your page will rise spectacularly.http://www.reviewplot.com/inbox-blueprint-2-review/
Make Your Marketing Strategies Cohesive With Your Pricing Competitiveness
Following with the idea stated in the section above, you can get advantage of competitive pricing intelligence by making your marketing strategies cohesive with your pricing competitiveness.This doesn’t necessarily mean that you have to lower your prices…actually, there are other pricing strategies. But you can improve your marketing performance with a better understanding of how customers see your products. Just follow these steps:
- Check which products of yours already have a good competitive pricing in the market.
- Check your marketing budget and see in which products’ advertisements you are investing more money.
- Do 1 and 2 have the same answer? They should.
Online advertisements may be much more profitable if instead of focusing on sales, you make your objective broader to get visitors – and also sales. If you focus only on sales, you will try to sell everything. If you also take a look at getting visitors, you will focus on advertising that your products are competitively priced, because that will bring more visitors to your site, and as stated before, the visits will have a higher conversion rate, with more customers buying more products in your e-shop.
Therefore, by just focusing your promotions on your most competitive products, you will improve your ROI without compromising on any margin cuts.
Similarly, you may notice that you are investing a large amount of money to promote a group of products which are not priced competitively. If that is the case, just finish this advertisement campaign that is just giving you visitors that will generate low conversion rates because of your pricing, since in the end, we all do that.We browse several competitors at the same time to compare their prices and get the best one.