Price is one of the primary factors for the success of our online business. Approximately 60% of users tend to buy more in specific e-commerce for the prices that it offers.
With the onset of the pandemic, the natural movement of business and the economy moved mostly to the web since quarantine restrictions forced us all to stay in our homes. In this way, according to Webloyalty studies, the amount of E-Commerce has increased by 24%, and the number of online buyers increased by 63%.
With so much demand on the web, it is important to stay competitive in terms of the prices you are offering in your niche, but how do you be aware of your competitors’ prices?
At Codedesign, we bring you the answers, so keep reading this article to find out how to keep track of the price of your competitors.
But before studying the prices of our competitors, let´s see more of our own prices…
How to price your products for your E-Commerce?
Pricing our services or products can be a confusing task. Knowing how much is too much or too little for what we are investing can raise many doubts, however there are three factors that can help you get an adequate price to generate profits and be accessible to your audience.
Let’s suppose that your business is in charge of selling sports shoes, each of these costs you $11. So, you must get a profit margin from each of these shoes, therefore you must sell them more expensive than they cost you, but how much?
You may think that to maintain the balance between an accessible product and the profits you should only sell it just a little more expensive, let’s say $ 18. But don’t you take into consideration all the other expenses you make? What about ads? Pay Per Click strategies? Any banner you can have? All these extra payments go into the price of the product, so if you sell it for $ 18 you will not generate much profit.
The idea is to multiply the initial price of your product by 3 or 4 – honestly, there is no indicated number for each case – and then in a sort of A / B test you will see how your users are responding to your prices.
The perceived value is how much a product is worth in the consumer´s mind.
If you sell your sports shoes for $ 150, your consumers will probably stop buying them, since they do not plan to spend so much money on sports shoes. However, a separate case are collector’s shoes like Air Jordan, which are limited items that are linked to a celebrity like Michael Jordan. In this case, the popularity of your brand tends to play a lot, you can buy a white shirt at H&M for $ 20 and the same shirt will cost $ 200 at Gucci.
The value of your brand is like the authority points that you have achieved in your niche, you already have such a large audience that is willing to pay anything for your products.
This is where we return to the comparison between Gucci and H&M. While H&M is popular for being cheap clothes that look good, Gucci is at the other extreme being one of the most expensive brands on the market. These two companies probably pay the same to produce your clothes – let’s imagine it’s $ 15 per shirt – but while one can only sell it for $ 35, Gucci can afford to sell it for $ 200.
Manual VS Automated competitor price tracking
Maintaining a detailed study of your competition allows you to continue in the market competition. Therefore it is always important to use any tool to study our online business environment in more depth.
Like SEO and PPC, digital marketing allows us to use free or paid strategies in our marketing plan, so we will compare which form of price tracking can be more effective for your business.
Every price manager knows that if you want to track competitors’ prices, it is crucial to make analytics on the datasets acquired. This is usually done by a team that covers characteristics of the competitor´s pricing, and the best tool to do this is Excel spreadsheets that keep all of the information in just one document. The downside of this method is that it can take a lot of time.
The huge amount of requirements and resources that this method needs can limit the effectiveness of manual price tracking. Let´s make an example.
Imagine that your competition offers a variety of 200 products, so once you have detected it, you open your excel sheet and place all the products. Completed work? We don’t think so.
If for some reason, your competition uses tools to keep track of their competitors, prices will keep changing constantly, and updating every moment of those changes is exhausting even for a large team.
Manual tracking may work for smaller niches or competitions where there is no demand but is otherwise very outdated.
Automated price tracking solutions are evolving at a quick velocity being the most preferred among e-commerce and retailers. While manual efforts are ineffective for gathering competitive intelligence, automated price monitoring solutions have no limitation in managing this information. Using these tools can help you reduce the time a team has to spend tracking the prices of all your competitors.
Today online buyers are bargain hunters, that is, if your price does not please them they will immediately go to look for the same product on another website. This is done by 94% of consumers according to Intelligence Node studies. Then, the competition becomes impossible for those who want to do precise tracking manually, since there are too many prices and competitors to have the real data. Online platforms such as Incompetitor help you obtain real-time information on prices and other important measures for the market. All of this will help you stay on the competitive front.
How to beat your competitors without lowering prices?
You do not need to lower the prices of your service to stand out from your competition, in fact there are ways to stand out even by charging more expensive than your challengers.
The basic thing is to add more to your perceived value, that your clients see you as an authority within your union, and therefore, they will always buy from you regardless of your prices.
There is a famous saying in marketing that it is under-promise and over-deliver, which means that your customers get more than they bargained for. However, there will be competitors who are going to over-promise and under-deliver, and they could lead your consumers with lower quality products.
The idea is to add value to your services which will allow you to offer extreme quality services and that when they receive it they will be more than pleased with your service.
Basically giving a quality service and being recognized for that allows you not to have to lower your prices to stand out, you simply must know and study what your audience asks for.
Technology has come to make our lives easier, therefore it is logical that any manual way of doing market research is left behind. Investigating the price of our competition makes it clear to us where we may be treading, and if our products are associated with the price we ask for them.
On the other hand, factors such as our authority in web domains give us the opportunity to ask for more for our services, since the value of our brand is even greater.To add value to our services, we must highlight the benefits we offer so that there is a direct relationship between quality and product.
At Codedesign we will continue to inform you about tactics to do a more in-depth market study, in this way your sales will continue to increase.
See you in a next article !!!
About the author:
We are Codedesign – a multi cultural, award-winning digital marketing agency . We define as a search-led, innovative digital marketing agency specializing in SEO, PPC, social media ads, content marketing and data analytics. We are trusted with growing the online presence of companies on a local, national and international scale.