Strategic pricing with timing

People are funny about when they'll pay a premium for an item they want. As a smart price-ologist (with specific interest in finding ho...

People are funny about when they'll pay a premium for an item they want. As a smart price-ologist (with specific interest in finding how to fight a price war) you want to find these wrinkles in the Universe, study them, and set up shop there. You want to figure out how to sell at the specific times that give you maximum pricing power.

Strategic pricing with timing

Timing Creates Strategic Pricing Power

Earlier we talked about a family planning a trip to Disneyland and how the prices at Disneyland weren't going to deter them from going. That's because your price can vary depending on how pre-sold your prospect is.

But your price can also vary by when your customer encounters your product. Disneyland can charge premium prices for their gift shop items because people say in their head, "We aren't going to be here again for a very long time - we better buy this t-shirt as a memento."

The Holiday Shopping season is the most top-of-mind example of how timing impacts pricing strategies in marketing. But there are many other examples, such as:
  • Back To School Shopping
  • Mother & Father's Day Shopping
  • Wedding & Funeral Shopping
  • Hobbyists Preparing For A Project Shopping
All of these are times when people are going to be in a "buying mood" and even the most frugal of shoppers is going to be willing to splurge for what they want - and pay a little bit more.

Does your product have this type of seasonality?

The Easiest Time (EVER) To Make A Sale Online

Of course, the easiest time to make a sale, and get a premium price, is when your customer is actively searching for a solution to their problem, (or a tool to help them meet a felt need or accomplish a project). That is why search engine advertising, (Google, Bing, Yahoo), makes so much sense. You are responding to people who are typing in phrases that indicate they want to buy something. That's a good time to have an encounter with a prospective customer.

Here is an example on aligning pricing with marketing and business, At Pixie Faire we are truly blessed to be the #1 online destination for digital doll clothes patterns. We started in September 2009 with just 11 sales, but since then we've had over 350,000 patterns downloaded. 124,000 of them were in 2013 alone.

Can you guess which month is our highest volume of sales each year? Why did you guess that month? (I'll reveal the answer at the bottom of this chapter - sneaky I know, right?!)

Having Time On Your Side Creates Pricing Power

Pricing Power exists when you can get time on your side. How do you do that? Here are a few ways:

Run an auction
The countdown timer is incredibly powerful. It's like a drum beat that people (who are in a buying mood) hear more and more loudly as the auction comes to a close. Price is NOT what they are primarily focused on it's the clock.

Hold Selling Events
If you set things up so that there is the real (and genuine) possibility of items being "sold out" - and that is clear to everyone involved you're pricing strategy will have pricing power. People stampede (sometimes literally) when they think items are going to be unavailable to them in the future.

Small Batch
Scarcity is one of the most effective psychological triggers when it comes to buying. One common way online retailers use scarcity is by selling things in small batches. We use that technique to help sell our physical items.

If Time Is On Your Side - Sell More

When customers are in a buying mood, you also want to ensure they get a complete set of options. They might want to add more to their shopping cart and you want those items to be easily available to them. You can do this by adding:

Up-Sells
The up-sell is simply offering your customer a larger, or bigger version of the product they're about to buy. One of the most famous up-sell phrases is "do you want the big one?” Of course McDonalds got into PR trouble for their famous slogan, "Super Sized?” They stopped using that phrase for PR reasons, not sales reasons.

Cross-Sells
The cross-sell is simply offering the customer a related product before they finish their transaction. The most famous phrase associated with cross-selling is, "combo?" Meaning "would you like to add fries and a drink to your order?"

Recurring Payments
Getting buyers set up on a recurring purchase arrangement is probably the most powerful selling technique of all time. Instead of asking the customer to simply buy the item one time, then having to ask them again, you simply ask them if they'd like to be set up as a recurring purchaser automatically. Product of the month clubs, membership sites, and related programs help accomplish this task.

Strategic pricing Action Steps:

  • Consider when you sell your items and brainstorm ways to you can sell more during peak buying seasons. Then brainstorm your up-sells, cross-sells and recurring purchase options to determine ways to maximize the buying experience.
  • Ps. Customers at Pixie Faire buy the most patterns in the month of January, (that has been true for the last 4 years anyway). Our theory is that people get dolls for Christmas - then go in search of patterns. Of course it doesn't hurt that in many places it's a very long winter and sewing projects are a good wintertime sport.

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Thought Leadership Zen: Strategic pricing with timing
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