Thinking of yet another promotion, a discount, or a special sale?
The common notion among managers is that no other marketing instrument is better suited to increase sales volume quickly and effectively than price cuts. That’s why price wars are the rule rather than the exception in many markets, often with devastating effects on profits.
According to the Wharton School of Business Baker Retailing Center, promotions may benefit price-conscious consumers. But the practice is unhealthy for retailers, for who competing on price with deeper discounts is creating a race to the bottom, shrinking profit margins, and diminished brand value, while making the path back to growth more difficult. “Once you discount you get into this spiral because your margins get slimmer, and then you also have to sell so much more to make up for the lost margin on the price. It’s sort of this vicious cycle that you get into.”
Our guide can help you stop competing on price.
“Facts matter not at all. Perception is everything. It’s certainty.”
– Steven Colbert
In the intangible world of eCommerce, the perception of price becomes even more crucial. Your shoppers cannot touch, feel or see the products so they rely heavily on visual and perceptual cues in their decision-making process so the perception of price becomes more important than the price itself. A price is no longer just a number but a reflection of the perceived value of the product or service in the customer’s eyes.
What's in it for you?
Hey there, I'm Helen Even Chen.
Digital marketing strategist, wanderer, insighter, foodie, a mom. I'm also the marketing psychology geek behind Insightout Digital.
I have an MBA in consumer behavior and I have been helping businesses big and small and teaching MBA students since 2004. I love helping entrepreneurs and eComm businesses just like you grow exponentially using systematic methods rooted in real human psychology and behavioral economics research.