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Grow Sales With The KISS Pricing Strategy

How a price is verbalised is directly related to how customers perceive it – and therefore your bottom line.

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This keep it simple sweetheart strategy can help you improve sales of your products or services. You can implement this strategy only after you have set the price that your customers are prepared to pay.

You can’t determine price before you take the following basic steps:

• Make marketing mix decisions
• Estimate the demand for your product or service
• Calculate the cost associated with the product or service
• Evaluate environmental factors
• Set pricing objectives.

This morning I decided to cook rice for my family. As I looked in the rice jar I realised that the rice was finished.

I just needed two cups of rice, so I send my son to the shop to buy two kilogrammes of rice. I gave him R100. When he came back he gave me a handful of loose change.

I asked, “Why such a small amount of change?” He replied, “That’s all the change they gave me,” and handed me the till slip as proof.

I counted the change and realised that it amounted to more than R70. The reason I had thought it was too little change for my R100 was because it was in R5 coins. Had the change come in the form of R50 and R20 notes, I would have immediately seen that it was the correct amount.

We all experience this at some stage. You check your wallet and find loose change and think you don’t have much money. However, this is all too often just a perception.

The same principle applies in pricing. If you want your customers to buy from you, you need to present your price in a way that makes it appear lower.

According to a research paper published by the Journal of Consumer Psychology, researchers found that prices containing more syllables when vocalised seemed much higher to customers.

In the paper they demonstrate that including commas and cents in a price can change how the price is programmed in the customers’ memory.

In fact, there is a positive relationship between the number of syllables in a price and its numerical size.

This can be easily understood with a demonstration:

1. R1,299.00
2. R1,299
3. R1 299

The first two numbers are perceived by the customer as higher than the third. The way a customer verbalise these numbers affects numerical size. The first number will verbalised as one thousand two hundred and ninety nine and third number will be verbalised as twelve ninety nine.

This verbalisation will unconsciously cause the customer to think R1,299 is higher than R1 299. The verbal subconscious programming of a written price can influence assessments of the numerical size of the price.

The Journal of Consumer Psychology concludes that these effects occur because consumers non-consciously perceive that there is a positive relationship between syllabic length and numerical magnitude.

Simple equals sales

When a price is presented in a longer version with commas and cents it is seen as a higher price. So when you present your price to your customers remember to keep it simple sweetheart. When presenting a price to your customers avoid commas and cents unless it is necessary.

If you want improve the chance of a sale adopt the simplest way to present the price to the customer. As you add any commas and cents it appears higher to your customer when he or she verbalises it.

R49 will sell more of your products or services than R48.60 will, even though the latter is lower.

Use this One Sentence to Sell Your Brand.

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Sipho Moganedi is the chief investment strategist at Wealth Point Capital Investments. Moganedi is an expert when it comes to business plan, business profile and business start-up consultations. He has a good business planning knowledge working in and with a broad range of businesses. Awarded a nation-building trophy in the Sowetan Business Ideas competition in 1990, he has worked with a number of entrepreneurs from different types of businesses and industries, while also having specific experience in running a publishing company, a direct-sales organisation and managing a stocks trading floor.

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Why Does Good Client Service Matter For E-commerce?

Remember, bad service is remembered for much longer than any products that have been purchased. And if you provide a positive experience, you will have a loyal customer base and can use the insights gathered from interactions.

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You might be scratching your head a little at the notion of an e-commerce store (yes, an online store) worrying too much about client service. After all, customers are using your website to purchase goods and avoid interacting with salespeople, right? But client service, or customer support as it is also known, is vital to running a successful e-commerce business. This is because consumers still expect the same level of care as they would from a brick-and-mortar store.

You will need to devise an e-commerce digital marketing strategy that can enhance your client service offerings. For example, you’ll need to put together an e-commerce email marketing customer base so that you can easily send out promotional emails, newsletters and reply to complaints. Your e-commerce website design should focus on the needs of the customer, so be sure to invest in a design that caters for them. Read on to find out why good client service is vital for e-commerce.

You can sell hundreds of products…

but bad service will always be remembered. For e-commerce in South Africa and around the world, client service is one of the major touchpoints that you have with your clients, meaning that you need to provide the best experience possible.

Online shoppers will likely have no physical contact with your brand, making client service the best chance to show customers that you truly care about them. Remember that customers want more than just a place to shop. They want an e-commerce business that is going to provide them with information that is relevant and help that truly solves a problem. You need a dedicated email address, Twitter handle, Facebook page or a live chat option where clients can contact you easily and efficiently.

Trust builds client relationships

By providing good customer support, you will be building trust between your customers and your brand. For example, if you provide personalised emails with product recommendations to loyal customers, they will see that you are taking note of their preferences and value their input.

As an e-commerce brand, you need to do more than brick-and-mortar stores to generate trust, which is where client service comes into play. You should look into building a customer support strategy that allows you to meet consumers at every touchpoint of their journey. This will show customers that you are a brand that is taking note of what they need. The reason for building trust is that, in the online shopping world, customers do not have to go very far (just a few clicks, in reality) to find another store with another shopping cart to fill. Focusing on what your client needs is a sure-fire way to improve consumer trust in your brand.

You will gain valuable insight

Client service is not only good for the customer, but can be good for your business too. You can gain valuable insight into the wants and needs of your customers as well as issues that you might not have known existed in your business.

It can make (or break) your brand reputation

Reputation is important, whether you are a physical store or an online one. And in the age of social media, can you really afford to offer bad client service? Today, people take to Facebook, Twitter and even Instagram to share their experiences with brands, whether their experience was positive or negative.

If your customer support is bad or inconsistent, customers will likely head to your Facebook business page or write something on their own profile for the world to see. And how you deal with this is also a part of your customer support. Be sure to always strive to provide customers with a positive interaction no matter the situation. Even if the customer is not always right, they should never have negative connotations with your brand.

Clients come first

Client service is one of the most important aspects of any e-commerce business. While you might think that all your consumers want is a place to shop without having to deal with crowds (an introvert’s dream), they expect the same level of client service they would receive in an actual store.

Remember, bad service is remembered for much longer than any products that have been purchased. And if you provide a positive experience, you will have a loyal customer base and can use the insights gathered from interactions.

3 Ecommerce Trends You Must Prepare For In 2019

The ecommerce explosion continues, but there’s also an element of evolution. To take your ecommerce presence to the next level, take advantage of these emerging trends.

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Retail ecommerce sales continue trending upward, and consumer confidence has reached an 18-year high. Conditions are ripe for brands with an established ecommerce presence, but that doesn’t mean business as usual will always suffice. Instead, the organisations that excel will be those with a forward-thinking approach to ecommerce.

Ecommerce is thriving because enough companies have kept up with changing technology and consumer expectations. For example, as mobile purchases increased in popularity, ecommerce retailers began specifically catering to this shopping avenue. Mobile purchases constituted the majority of ecommerce sales in 2016, and eMarketer estimates that 72.9 percent of online purchases will be made on a mobile device by 2021.

Device preferences aren’t the only thing in transition – search methods are also quickly evolving as technology becomes more sophisticated. According to predictions from ComScore, 50 percent of all search queries will be made via voice by 2020. And it’s likely that more people will be audio searching for buyable goods soon: Devices such as Google Home Hub and Amazon Echo Show are integrating voice and image search so that shoppers can see what they’re asking to buy. Ecommerce retailers that can’t cater to a voice-activated future (Read: optimise for natural language search) will quickly lose ground to their rivals.

Ecommerce companies are also partnering with payment processors to make online purchases as frictionless as possible. By offering payment options such as PayPal, Venmo and Amazon Pay at checkout, customers can leave their credit cards in their wallets, so buying becomes even easier.

No matter how mature your ecommerce presence might be now, you need to keep looking ahead to ensure future success. To elevate your ecommerce efforts in 2019, take advantage of these three emerging trends.

1. Sell your wares on social

Effective marketing is about optimising your messaging to appeal to your target audience, but messaging won’t matter if the audience never sees it. Meeting your audience members where they spend their time is crucial, and here’s a tip: If your customer base is online, it’s on social media one-third of that time.

If you’re not selling on social media, you’re missing a huge opportunity. Most social media platforms now support integrated buy buttons that transfer users to your website to complete a sale, and apps such as Instagram and Snapchat offer shoppable stories, too.

Retail brands like Jordan have also capitalised on event-related social commerce opportunities. For the 2018 NBA All-Star Game, Jordan partnered with Snapchat to offer access codes to an exclusive sale of the special edition Air Jordan III Tinker shoe. Users could only receive a code if they were near the Staples Center in Los Angeles, and the sneakers sold out in 23 minutes.

Related: 6 Steps To Building A Million-Dollar Ecommerce Site In 60 Days

Mixed reality technologies have yet to see mainstream adoption, but they have made huge strides in that direction. Vertebrae’s launch of its AR/VR ecommerce platform Axis aims to prove that the tech is much more than a novelty, and IKEA’s Place app provides shoppers with an AR-powered glimpse into what IKEA products would look like in their own homes.

“Augmented reality and virtual reality will be a total game changer for retail in the same way as the internet. Only this time, much faster,” says Michael Valdsgaard, leader of digital transformation at Inter IKEA Systems.

AR might not be everywhere yet, but ecommerce retailers that successfully incorporate AR capabilities into the shopping experience stand to gain a significant advantage over their competitors.

Amazon has established a pre-eminent place in the ecommerce ecosystem, and Salmon’s “Future Shopper Report” indicates that 68 percent of American shoppers head straight to the site when browsing for products. What’s more, even when customers plan to buy from another site or store, 80 percent read Amazon reviews and check prices there.

Clearly, mastering Amazon is critical. Trevor George, founder and CEO of Amazon marketing agency Blue Wheel Media, says that the only way for sellers to win on the platform is through ads: “The future of Amazon is advertising, and if a brand wants to make money now and into the future, it needs to be able to navigate Amazon’s advertising platforms.”

According to George, that means investing in auto-bidding tools such as Prestozon or Ignite, isolating the right search terms, and incorporating negative keywords so your appliance company isn’t spending money to appear in searches for Easy-Bake Ovens.

The ecommerce boom isn’t waning anytime soon, and capitalising on it requires a thoughtful strategy that keeps your brand ahead of the competition. Keep social commerce, mixed reality shopping and Amazon advertising on your mind through 2019.

Read next: Watch List: 15 SA eCommerce Entrepreneurs Who Have Built Successful Online Businesses

Techniques

If you’re thinking about selling your business, there are some critical steps you need to make first.

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MAKING THE SALE

A successful transaction will mostly boil down to having a solid business with great systems in place that is making decent money and the starting point for these transactions will be financial information.

Some entrepreneurs are ‘starters’, they like to start a business, get it off the ground and then flog it. Others are ‘growers’, they look for existing businesses and have the ability to grow them beyond their original value. Both will probably get to the same end point: Selling the business.

But entrepreneurs are often misled when it comes to the sale. They have put everything into the business and it is worth a huge amount to them because of it. But buyers are seldom willing to match the price, because what is being sold, and what is being bought, are not the same thing. Sellers see the emotional and financial investments they’ve put in; the buyer mostly looks at one thing: Profit.

Effort does not equal profit. The balance is out.

Related: 20 South African Side-Hustles You Can Start This Weekend

Prepare for the challenges of selling

Once you get to market you will soon realise that there are, unfortunately, fewer buyers than you’d like. Unlike listed companies, you can’t sell shares easily and quickly on a public platform. Instead, you need to find an interested individual or business, many of whom just aren’t buying what you’re selling.

Some of them are, but that doesn’t guarantee a sale. Most SMEs must put their faith in a cash deal, since banks will never finance anyone wanting to buy them. In reality, this means that you may have a genuinely interested buyer for your business, who won’t be able to get finance for it from the bank. So, after a few months, you’re back to square one. After a few rounds of this cycle many entrepreneurs will just sell out of desperation, forgetting what the business could actually be worth.

Selling a business can be very emotionally draining and this will be compounded by many people who will waste your time and mess you around. You spent a large portion of your life building this, but others will not see it the same way you do. Ensure that you prepare and mitigate against all of those issues, and have the stomach for the fight.

Always keep the end in mind

If you are looking at exiting your business, it is crucial to allow enough time to prepare yourself for it. Maybe you’re simply tired of your business and you just want to get out, but, because the business is not in a great state at the moment, you’re too fed up to care, and you simply don’t have the energy to fix the issues.

You’re at risk of letting your business go for next to nothing. All the hard work for hardly any reward.

If you have the end in mind, and prepare for it, it can be a very different, more lucrative story. A successful transaction will mostly boil down to having a solid business with great systems in place that is making decent money and the starting point for these transactions will be financial information. You need to have proper financial records for your business and you need to be able to show the potential buyer how much the business is making and how it is making it. It sounds so elementary, yet most entrepreneurs don’t have financial information when they want to sell their businesses. If you think you may want to sell in the future, make sure you’re keeping solid records now.

With some (more) hard work, you will be in a great position to sell your business, you will have serious buyers and the valuation that you deserve for all your hard work. If you don’t, why bother?