Starting with your dynamic pricing strategy, you can also automate price changes with self-learning artificial intelligence software like Reactev. This will help you increase profitability and contribute to the company’s growth. One thing that dynamic pricing makes possible is testing to identify the most appropriate prices.
Test, evaluate and automate your price changes It is, again, essential to have the right pricing rules to adapt prices to users’ expectations. If the customer does not expect it, a very radical change or one they consider out of place can make them dissatisfied with the brand and maybe abandon the basket. Some products, such as fashion or technology, lend themselves to more changes, while higher-priced products tend to be more stable. You must analyze and determine this in a personalized way for every article and each buyer persona. One of the most prevalent dynamic pricing oversights is failing to consider what consumers expect, both in terms of the value of each product and the frequency with which prices change. Analyze each product’s perceived value and customers’ expectations In other words, it must go hand in hand with the combination of promotions, personalized offers, lead times, and shipping costs that make the sale possible. Therefore, your dynamic pricing strategy must boost the value proposition they choose. This is why it is vital to remember that the customer makes the purchase decision based on the final price they will pay, including taxes, shipping costs, handling fees or any other added costs. One of the objectives of dynamic pricing is to boost the conversion rate. Apply dynamic pricing to the final selling price
However, avoid publishing different prices without a clear explanation, both online and in-store. For example, you can offer exclusive discounts for mobile purchases. In multi-channel businesses, consumers must perceive consistency. Keep prices consistent across all your sales channelsĪnother mistake often found in dynamic pricing is failing to maintain consistent prices across different sales channels and devices. Determining your goals, strategy, and rules will also help you avoid starting price wars with competitors and aid price calculations. This is also why price changes must fall within previously set business and pricing parameters or rules. Otherwise, offering prices removed from your identity or your profit margin may damage your brand image. It should mean changes that make sense, that will help you outperform competitors and attract a greater volume of consumers. Switching to dynamic pricing does not have to be synonymous with constantly changing the price of every product in your portfolio. Define a dynamic pricing strategy consistent with your brand image and goals
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