Price Sensitivity and Tips for Reducing Price
How do you set prices for your products? Deciding how much a product or service should cost is a step that many do not take seriously. Rather than taking into account different factors and a lot of data to build a pricing strategy, many simply rely on their experience and feelings when setting a price.
If you get to know yourself ... ⚠️ATTENTION! You may be losing a significant chunk of your profits right now! PRICE plays an important role in the decision-making process for many clients.
Price sensitivity is the percentage of sales made at a given price. In simple terms, this metric lets you know what percentage of your consumers think each price you offer is reasonable.
When a brand or retailer notices that a customer has lost interest in a product (low price sensitivity), the first reason that comes to the owner's mind is the high cost of the product. However, this is not always the case, if your product and/or brand is not well known, then a price cut will lead to short-term interest, but you need to strive to get a regular customer and maintain high price sensitivity!
We have already described the TOP-5 tips for suppliers: how to ensure the growth of sales for your products, we will briefly add:
- Marketing (Show Your Product is Better) - Buyers will always pay attention to the price. However, for many customers, product quality is also a very important factor. Only you may know that your product has great qualities, but how will customers know about it? That's right, through advertising! Try to highlight the benefits that will serve as evidence of the price set.
- Branding - Price sensitivity is usually high as the brand gets stronger. There are many different alternatives for almost every product on the market, but do people want to buy from a stranger? No, if you've built a strong and recognizable brand, people will strive to simplify decision-making by sticking to your brand instead of wasting time trying something new.
- Unique experience - try to make the relationship with the client more personal. Give them special offers and personalized promotions, try to understand their needs, and answer their questions.
- Pricing policy - analyze the prices of competitors for a similar group of products, set a competitive price.
Use an integrated approach in choosing a pricing policy for a product, and our online price monitoring service 7-PRICE will always help you with high-quality market analytics!